[Federal Register Volume 59, Number 85 (Wednesday, May 4, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10618]


[[Page Unknown]]

[Federal Register: May 4, 1994]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE
Farmers Home Administration

7 CFR Parts 1823, 1910, 1941, 1942, 1943, 1944, 1945, 1948, 1951, 
and 1980

RIN: 0575-AA66

 

Denying Credit to Applicants Delinquent on Federal Debt

AGENCY: Farmers Home Administration, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Farmers Home Administration (FmHA) proposes to amend its 
regulations concerning program eligibility requirements. These 
revisions will direct field offices to suspend processing of an 
application if an applicant is found to be delinquent on a Federal debt 
until the delinquency is resolved, and to deny credit if a Federal 
judgment is found against an applicant. This action is necessary to 
implement requirements of OMB Circular A-129, ``Policies for Federal 
Credit Programs and Non-Tax Receivables.'' Denying credit to applicants 
against whom there is a Federal judgment is mandated by provisions of 
the Federal Debt Collections Procedures Act of 1990. The intended 
effect of this action is to instruct field offices on how to obtain 
more information to be used in determining loan, grant and loan 
servicing eligibility.

DATES: Comments must be submitted on or before July 5, 1994.

ADDRESSES: Submit written comments in duplicate to the Office of the 
Chief, Regulations Analysis and Control Branch, Farmers Home 
Administration, USDA, South Building, room 6348, 14th and Independence 
Avenue, SW., Washington, DC 20250. All written comments made pursuant 
to this notice will be available for public inspection during regular 
working hours at the above address.

FOR FURTHER INFORMATION CONTACT: Daniel K. Wanamaker, Senior Financial 
Analyst, Farmers Home Administration, U.S. Department of Agriculture, 
room 6446, South Agriculture Building, Washington, DC 20250, Telephone 
(202) 690-0501.

SUPPLEMENTARY INFORMATION:

Classification

    This rule has been determined not-significant for purposes of 
Executive Order 12866 and therefore has not been reviewed by OMB.

Environmental Impact Statement

    This document has been reviewed in accordance with 7 CFR Part 1940, 
Subpart G, ``Environmental Program.'' FmHA has determined that this 
action does not constitute a major Federal action significantly 
affecting the quality of the human environment and, in accordance with 
the National Environmental Policy Act of 1969, Public Law 91-190, an 
Environmental Impact Statement is not required.

Paperwork Reduction Act

    The information collection requirements contained in these 
regulations have been approved by the Office of Management and Budget 
(OMB) under the provisions of 44 U.S.C. chapter 35 and have been 
assigned OMB control numbers 0575-0134, 0575-0141, 0575-0132, 0575-
0097, 0575-0123, 0575-0074, 0575-0085, 0575-0083, 0575-0059, 0575-0045, 
0575-0047, 0575-0062, 0575-0090, 0575-0130, 0575-0066, 0575-0079, 0575-
0029, and 0575-0137 in accordance with the Paperwork Reduction Act of 
1980 (44 U.S.C. 3507). The proposed rule does not revise or impose any 
new information collection or recordkeeping requirement from those 
approved by OMB.

Intergovernmental Review

    These changes affect the following FmHA programs as listed in the 
Catalog of Federal Domestic Assistance:

10.404  Emergency Loans
10.405  Farm Labor Housing Loans and Grants
10.406  Farm Operating Loans
10.407  Farm Ownership Loans
10.410  Low Income Housing Loans (Section 502 Rural Housing Loans)
10.411  Rural Housing Site Loans (Section 523 and 524 Site Loans)
10.414  Resource Conservation and Development Loans
10.415  Rural Rental Housing Loans
10.416  Soil and Water Loans (SW Loans)
10.417  Very Low Income Housing Repair Loans and Grants
10.418  Water and Waste Disposal Systems for Rural Communities
10.419  Watershed Protection and Flood Prevention Loans
10.420  Rural Self-Help Housing Technical Assistance (Section 523 
Technical Assistance)
10.421  Indian Tribes and Tribal Corporation Loans
10.422  Business and Industrial Loans
10.423  Community Facility Loans
10.434  Nonprofit Corporations Loan and Grant Program
10.436  Technical Assistance and Training Grants

    Programs listed under numbers 10.404, 10.406, 10.407, 10.410, 
10.417, 10.421, 10.428, and 10.435 are not subject to the provisions of 
Executive Order 12372 which requires intergovernmental consultation 
with State and local officials (7 CFR part 3015, subpart V, 48 FR 
29115, June 24, 1983).
    Programs listed under numbers 10.405, 10.411, 10.414, 10.415, 
10.416, 10.418, 10.419, 10.420, 10.422, 10.423, 10.427, 10.433, and 
10.434 are subject to the provisions of Executive Order 12372 (7 CFR 
3015, subpart V, 48 FR 29112, June 24, 1983; 49 FR 22675, May 31, 1984; 
50 FR 14088, April 10, 1985).

Regulatory Flexibility Act

    The Administrator of the Farmers Home Administration has determined 
that this action will not have a significant economic impact on a 
substantial number of small entities because it contains normal 
business recordkeeping requirements and minimal essential reporting 
requirements.

Background Information

    The current loan application procedures require that an applicant 
provide certification that it is not delinquent on a Federal debt. For 
the purpose of verifying an applicant's certification, FmHA proposes to 
amend its instructions by revising each eligibility section to instruct 
the field offices to access the Department of Housing and Urban 
Development's Credit Alert Interactive Voice System (CAIVRS) to verify 
that the applicant is not delinquent on a Federal debt. If a 
delinquency is found, processing of the application will be suspended. 
The applicant will be notified that processing has been suspended and 
will be asked to contact the appropriate Federal agency, at the 
telephone number provided by CAIVRS, to resolve the delinquency. When 
the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued. If the applicant is unable to 
resolve the delinquency, or if an outstanding judgment obtained by the 
United States in a Federal Court (other than the United States Tax 
Court), which has been recorded, is found, assistance may be denied.

List of Subjects

7 CFR Part 1823

    Credit, Indians.

7 CFR Part 1910

    Applications, Credit, Loan programs--agriculture, Loan programs--
housing and community development, Low and moderate income housing, 
Marital status discrimination, Sex discrimination.

7 CFR Part 1941

    Crops, Livestock, Loan programs--agriculture, Rural areas, Youth.

7 CFR Part 1942

    Business and industry, Community development, Community facilities, 
Grant programs--housing and community development, Industrial park, 
Loan programs--housing and community development, Loan programs--
natural resources, Loan security, Rural areas, Soil conservation, Waste 
treatment and disposal--domestic, Water supply--domestic.

7 CFR Part 1943

    Credit, Loan programs--agriculture, Recreation, Water resources.

7 CFR Part 1944

    Administrative practice and procedure, Aged, Farm labor housing, 
Grant programs--housing and community development, Handicapped, Home 
improvement, Loan programs--housing and community development, Low and 
moderate income housing--rental, Migrant labor, Mobile homes, 
Mortgages, Nonprofit organizations, Public housing, Rent subsidies, 
Rural housing, Subsidies.

7 CFR Part 1945

    Agriculture, Disaster assistance, Loan programs--agriculture.

7 CFR Part 1948

    Business and industry, Coal, Community development, Community 
facilities, Energy, Grant programs--housing and community development, 
Housing, Nuclear energy, Planning, Rural areas, Transportation, 
Economic development.

7 CFR Part 1951

    Accounting servicing, Grant programs--housing and community 
development, Reporting requirements, Rural areas.

7 CFR Part 1980

    Agriculture, Grant programs--Nonprofit corporations, Loan 
programs--agriculture, Loan programs--business and industry--Rural 
development assistance, Loan programs--nonprofit corporations, Rural 
areas, Loan programs--community programs, Rural development assistance.

    Therefore, as proposed, Chapter XVIII, Title 7, Code of Federal 
Regulations is amended as follows:

PART 1823--ASSOCIATION LOANS AND GRANTS--COMMUNITY FACILITIES, 
DEVELOPMENT, CONSERVATION, UTILIZATION

    1. The authority citation for part 1823 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
2.23; 7 CFR 2.70.

Subpart N--Loans to Indian Tribes and Tribal Corporations

    2. Section 1823.403 is amended by adding paragraph (d) to read as 
follows:


Sec. 1823.403  Eligibility.

* * * * *
    (d) Not be delinquent on any Federal debt or have a Federal 
judgment lien against its property.
    (1) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny credit can be based solely on the results of 
the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
District Office will immediately suspend processing of the application. 
The applicant will be notified that processing has been suspended and 
will be asked to contact the appropriate Federal agency, at the 
telephone number provided by CAIVRS, to resolve the delinquency. When 
the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (2) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive the rejection upon specific determination that 
it is in the best interest of the Government to do so.

PART 1910--GENERAL

    3. The authority citation for part 1910 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
2.23; 7 CFR 2.70.

Subpart A--Receiving and Processing Applications

    4. Section 1910.4 is amended by adding paragraph (g)(3) to read as 
follows:


Sec. 1910.4  Processing applications.

* * * * *
    (g) * * *
    (3) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible for any loan or 
grant until the judgment is paid in full or otherwise satisfied. FmHA 
loan or grant funds may not be used to satisfy the judgment. Questions 
about whether or not a judgment is still outstanding should be directed 
to the Office of the General Counsel. The Administrator may waive this 
restriction upon specific determination that it is in the best interest 
of the Government to do so. A decision to deny a loan for this reason 
is not appealable.
* * * * *
    5. Section 1910.5 is amended by adding paragraph (e) to read as 
follows:


Sec. 1910.5  Evaluating applications.

* * * * *
    (e) Delinquency on a Federal debt. Form FmHA 1910-3, ``Record of 
Credit Alert Interactive Voice Response System (CAIVRS) Inquiry,'' will 
be used to help determine if an applicant is delinquent on any Federal 
debt.

PART 1941--OPERATING LOANS

    6. The authority citation for Part 1941 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
2.23; 7 CFR 2.70.

Subpart A--Operating Loan Policies, Procedures, and Authorizations

    7. Section 1941.12 is amended in paragraphs (a)(1) and (b)(5)(i) in 
the fourth sentence by changing the reference from ``INS Form G-641, 
`Application for Verification of Information from Immigration and 
Naturalization Records,' '' to ``INS Form G-639, `Verification Request 
Form,' '' and in the last sentence by changing the reference from ``INS 
Form G-641'' to ``INS Form G-639,'' by revising the introductory text 
and paragraphs (a)(4) and (b)(5)(iii), and by adding paragraph (d) to 
read as follows:


Sec. 1941.12  Eligibility requirements.

    Subject to the restrictions listed in paragraph (d) of this 
section, an applicant is eligible for loan assistance if the following 
requirements are met:
    (a) * * *
    (4) Have the character (emphasizing credit history, past record of 
debt repayment and reliability) and industry to carry out the proposed 
operation. Past record of debt repayment will not be cause for a 
determination that the applicant/borrower is not eligible if an honest 
attempt has been made to meet the payment(s). However, delinquency on a 
Federal debt shall cause the applicant to be ineligible for loan 
assistance (other than for certain Farmer Program loans as provided in 
Sec. 1941.14 of this subpart).
    (i) The County Office will use Form FmHA 1910-3, ``Record of Credit 
Alert Interactive Voice Response System (CAIVRS) Inquiry,'' to check 
the Department of Housing and Urban Development's CAIVRS to determine 
if the applicant is delinquent on a Federal debt. No decision to deny 
credit can be based solely on the results of the CAIVRS inquiry. If 
CAIVRS identifies a delinquent Federal debt, the County Office will 
immediately suspend processing of the application. The applicant will 
be notified that processing has been suspended and will be asked to 
contact the appropriate Federal agency, at the telephone number 
provided by CAIVRS, to resolve the delinquency. When the applicant 
provides FmHA with official documentation that the delinquency has been 
paid in full or otherwise resolved, processing of the application will 
be continued.
    (ii) If the applicant is delinquent on a Federal debt, and is 
unable to resolve the delinquency, the application will be rejected 
(unless applying for certain Farmer Program loans as providied in 
Sec. 1914.14 of this subpart) and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive this restriction upon specific 
determination that it is in the best interest of the Government to do 
so.
* * * * *
    (b) * * *
    (5) * * *
    (iii) They and the entity itself must have the character 
(emphasizing credit history, past record of debt repayment and 
reliability) and industry to carry out the proposed operation. Past 
record of debt repayment will not be cause for a determination that the 
applicant/borrower is not eligible if an honest attempt has been made 
to meet the payment(s). Delinquency on a Federal debt (other than a 
Farmer Program debt, in accordance with Sec. 1941.14 of this subpart), 
by the entity or any of its members shall cause the entity to be 
ineligible.
    (A) The County Office will use Form FmHA 1910-3 to check the 
Department of Housing and Urban Development's CAIVRS to determine if 
the entity or any of its members is delinquent on a Federal debt. No 
decision to deny credit can be based solely on the results of the 
CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
County Office will immediately suspend processing of the application. 
The applicant will be notified that processing has been suspended and 
will be asked to contact the appropriate Federal agency, at the 
telephone number provided by CAIVRS, to resolve the delinquency. When 
the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (B) If the applicant is delinquent on a Federal debt (other than a 
Farmer Program debt) and is unable to resolve the delinquency, the 
application will be rejected and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive this restriction upon specific 
determination that it is in the best interest of the Government to do 
so.
* * * * *
    (d) Restrictions. An applicant will be considered ineligible for 
loan assistance under any of the following circumstances. A decision to 
deny a loan for any of these reasons is not appealable.
    (1) In accordance with the Food Security Act of 1985 (Pub. L. 99-
198), after December 23, 1985, if an individual or any member, 
stockholder, partner, or joint operator of an entity is convicted under 
Federal or State law of planting, cultivating, growing, producing, 
harvesting, or storing a controlled substance (see 21 CFR part 1308, 
which is exhibit C of this subpart (available in any FmHA office) for 
the definition of ``controlled substance'') prior to loan approval in 
any crop year, the individual or entity shall be ineligible for a loan 
for the crop year in which the individual or member, stockholder, 
partner, or joint operator of the entity was convicted and the four 
succeeding crop years. Applicants will attest on Form FmHA 410-1, 
``Application for FmHA Services,'' that as individuals or that its 
members, if an entity, have not been convicted of such crimes after 
December 23, 1985.
    (2) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible for any Farmer 
Program loan until the judgment is paid in full or otherwise satisfied. 
FmHA loan funds may not be used to satisfy the judgment. Questions 
about whether or not a judgment is still outstanding should be directed 
to the Office of the General Counsel. The Administrator may waive this 
restriction upon specific determination that it is in the best interest 
of the Government to do so.

PART 1942--ASSOCIATIONS

    8. The authority citation for part 1942 continues to read as 
follows:


    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
2.23; 7 CFR 2.70.

Subpart A--Community Facility Loans

    9. Section 1942.2 is amended by redesignating paragraphs (a)(2) 
through (a)(4) as (a)(3) through (a)(5), by adding a new paragraph 
(a)(2), and by revising newly redesignated paragraph (a)(3)(ii) to read 
as follows:


Sec. 1942.2  Processing applications.

    (a) * * *

(2) Delinquency on a Federal Debt

    (i) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny credit can be based solely on the results of 
the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
District Office will immediately suspend processing of the application. 
The applicant will be notified that processing has been suspended and 
will be asked to contact the appropriate Federal agency, at the 
telephone number provided by CAIVRS, to resolve the delinquency. When 
the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (ii) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive the rejection upon specific determination that 
it is in the best interest of the Government to do so.
    (3) * * *
    (ii) The State Office shall maintain a working relationship with 
the State agency or official that has been designated as the single 
point of contact for the intergovernmental review process and give full 
consideration to their comments when selecting preapplications to be 
processed.
* * * * *

Subpart C--Fire and Rescue Loans

    10. Section 1942.111 is amended by adding paragraph (d) to read as 
follows:


1942.111  Applicant eligibility.

* * * * *

(d) Delinquency on a Federal Debt

    (1) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny credit can be based solely on the results of 
the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
District Office will immediately suspend processing of the application. 
The applicant will be notified that processing has been suspended and 
will be asked to contact the appropriate Federal agency, at the 
telephone number provided by CAIVRS, to resolve the delinquency. When 
the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (2) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter.
    The Administrator may waive the rejection upon specific 
determination that it is in the best interest of the Government to do 
so.

Subpart G--Rural Business Enterprise Grants and Television 
Demonstration Grants

    11. Section 1942.305 is amended by adding paragraph (a)(4) to read 
as follows:


Sec. 1942.305  Eligibility and priority.

    (a) * * *

(4) Delinquency on a Federal Debt

    (i) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny assistance can be based solely on the results 
of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
the District Office will immediately suspend processing of the 
application. The applicant will be notified that processing has been 
suspended and will be asked to contact the appropriate Federal agency, 
at the telephone number provided by CAIVRS, to resolve the delinquency. 
When the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (ii) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive the rejection upon specific determination that 
it is in the best interest of the Government to do so.
* * * * *

Subpart H--Development Grants for Community Domestic Water and 
Waste Disposal Systems

    12. Section 1942.356 is amended by adding paragraph (a)(4) to read 
as follows:


Sec. 1942.356  Applicant eligibility and priority.

    (a) * * *
    (4) Applicant is not delinquent on a Federal debt.
    (i) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny assistance can be based solely on the results 
of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
the District Office will immediately suspend processing of the 
application. The applicant will be notified that processing has been 
suspended and will be asked to contact the appropriate Federal agency, 
at the telephone number provided by CAIVRS, to resolve the delinquency. 
When the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (ii) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive the rejection upon specific determination that 
it is in the best interest of the Government to do so.
* * * * *

Subpart I--Resource Conservation and Development (RCD) Loans and 
Watershed (WS) Loans and Watershed Advances

    13. Section 1942.405 is amended by adding paragraph (f) to read as 
follows:


Sec. 1942.405  Eligibility.

* * * * *
    (f) Applicant must not be delinquent on a Federal debt.
    (1) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny assistance can be based solely on the results 
of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
the District Office will immediately suspend processing of the 
application. The applicant will be notified that processing has been 
suspended and will be asked to contact the appropriate Federal agency, 
at the telephone number provided by CAIVRS, to resolve the delinquency. 
When the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (2) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive the rejection upon specific determination that 
it is in the best interest of the Government to do so.

Subpart J--Technical Assistance and Training Grants

    14. Section 1942.457 is amended by adding paragraph (d) to read as 
follows:


Sec. 1942.457  Eligibility.

* * * * *
    (d) The applicant must not be delinquent on a Federal debt.
    (1) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny assistance can be based solely on the results 
of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
the District Office will immediately suspend processing of the 
application. The applicant will be notified that processing has been 
suspended and will be asked to contact the appropriate Federal agency, 
at the telephone number provided by CAIVRS, to resolve the delinquency. 
When the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (2) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive the rejection upon specific determination that 
it is in the best interest of the Government to do so.

Subpart K--Emergency Community Water Assistance Grants

    15. Section 1942.506 is amended by adding paragraph (c) to read as 
follows:


Sec. 1942.506  Eligibility.

* * * * *
    (c) The applicant must not be delinquent on a Federal debt.
    (1) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny assistance can be based solely on the results 
of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
the District Office will immediately suspend processing of the 
application. The applicant will be notified that processing has been 
suspended and will be asked to contact the appropriate Federal agency, 
at the telephone number provided by CAIVRS, to resolve the delinquency. 
When the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (2) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive the rejection upon specific determination that 
it is in the best interest of the Government to do so.

PART 1943--FARM OWNERSHIP, SOIL AND WATER AND RECREATION

    16. The authority citation for part 1943 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
2.23; 7 CFR 2.70.

Subpart A--Insured Farm Ownership Loan Policies, Procedures, and 
Authorizations

    17. Section 1943.12 is amended in paragraphs (a)(1) and (b)(4)(i) 
in the fourth sentence by changing the reference from ``INS Form G-641, 
`Application for Verification of Information from Immigration and 
Naturalization Records,''' to ``INS Form G-639, `Verification Request 
Form,''' and in the last sentence by changing the reference from ``INS 
Form G-641'' to ``INS Form G-639,'' by revising the introductory text 
and paragraphs (a)(4) and (b)(4)(iii), and by adding paragraph (d) to 
read as follows:


Sec. 1943.12  Farm ownership loan eligibility requirements.

    Subject to the restrictions listed in paragraph (d) of this 
section, an applicant is eligible for loan assistance if the following 
requirements are met:
    (a) * * *
    (4) Have the character (emphasizing credit history, past record of 
debt repayment, and reliability) and industry to carry out the proposed 
operation. Past record of debt repayment will not be cause for a 
determination that the applicant/borrower is not eligible if an honest 
attempt has been made to make the payment(s). If an applicant is 
delinquent on a Federal debt (other than a Farmer Program debt, in 
accordance with Sec. 1941.14 of subpart A of part 1941 of this 
chapter), it is automatically ineligible for loan assistance.
    (i) The County Office will use Form FmHA 1910-3, ``Record of Credit 
Alert Interactive Voice Response System (CAIVRS) Inquiry,'' to check 
the Department of Housing and Urban Development's CAIVRS to determine 
if the applicant is delinquent on a Federal debt. No decision to deny 
credit can be based solely on the results of the CAIVRS inquiry. If 
CAIVRS identifies a delinquent Federal debt, the County Office will 
immediately suspend processing of the application. The applicant will 
be notified that processing has been suspended and will be asked to 
contact the appropriate Federal agency, at the telephone number 
provided by CAIVRS, to resolve the delinquency. When the applicant 
provides FmHA with official documentation that the delinquency has been 
paid in full or otherwise resolved, processing of the application will 
be continued.
    (ii) If the applicant is delinquent on a Federal debt (other than a 
Farmer Program debt), and is unable to resolve the delinquency, the 
application will be rejected and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive this restriction upon specific 
determination that it is in the best interest of the Government to do 
so.
* * * * *
    (b) * * *
    (4) * * *
    (iii) Have the character (emphasizing credit history, past record 
of debt repayment, and reliability) and industry to carry out the 
proposed operation. This requirement must be met by the individual 
members, stockholders, partners, or joint operators. Past record of 
debt repayment will not be cause for a determination that the 
applicant/borrower is not eligible if an honest attempt has been made 
to make the payment(s). If the entity or any of its members is 
delinquent on a Federal debt (other than a Farmer Program debt, in 
accordance with Sec. 1941.14 of subpart A of part 1941 of this 
chapter), the entity is automatically ineligible for loan assistance.
    (A) The County Office will use Form FmHA 1910-3 to check the 
Department of Housing and Urban Development's CAIVRS to determine if 
the entity or any of its members is delinquent on a Federal debt. No 
decision to deny credit can be based solely on the results of the 
CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
County Office will immediately suspend processing of the application. 
The applicant will be notified that processing has been suspended and 
will be asked to contact the appropriate Federal agency, at the 
telephone number provided by CAIVRS, to resolve the delinquency. When 
the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (B) If the applicant is delinquent on a Federal debt (other than a 
Farmer Program debt) and is unable to resolve the delinquency, the 
application will be rejected and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive this restriction upon specific 
determination that it is in the best interest of the Government to do 
so.
* * * * *
    (d) Restrictions. An Applicant will be considered ineligible for 
loan assistance under any of the following circumstances. A decision to 
deny a loan for any of these reasons is not appealable.
    (1) In accordance with the Food Security Act of 1985 (Pub. L. 99-
198), after December 23, 1985, if an individual or any member, 
stockholder, partner, or joint operator of an entity is convicted under 
Federal or State law of planting, cultivating, growing, producing, 
harvesting, or storing a controlled substance (see 21 CFR part 1308, 
which is exhibit C of subpart A of part 1941 of this chapter (available 
in any FmHA office) for the definition of ``controlled substance'') 
prior to loan approval in any crop year, the individual or entity shall 
be ineligible for a loan for the crop year in which the individual or 
member, stockholder, partner, or joint operator of the entity was 
convicted and the four succeeding crop years. Applicants will attest on 
Form FmHA 410-1, ``Application for FmHA Services,'' that as individuals 
or that its members, if an entity, have not been convicted of such 
crimes after December 23, 1985.
    (2) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible for any Farmer 
Program loan until the judgment is paid in full or otherwise satisfied. 
FmHA loan funds may not be used to satisfy the judgment. Questions 
about whether or not a judgment is still outstanding should be directed 
to the Office of the General Counsel. The Administrator may waive this 
restriction upon specific determination that it is in the best interest 
of the Government to do so.

Subpart B--Insured Soil and Water Loan Policies, Procedures, and 
Authorizations

    18. Section 1943.62 is amended in paragraphs (a)(1) and (b)(3) in 
the fourth sentence by changing the reference from ``INS Form G-641, 
`Application for Verification of Information from Immigration and 
Naturalization Records,''' to ``INS Form G-639, `Verification Request 
Form,''' and in the seventh sentence by changing the reference from 
``INS Form G-641'' to ``INS Form G-639,'' by revising the introductory 
text and paragraphs (a)(4) and (b)(1), and by adding paragraph (c) to 
read as follows:


Sec. 1943.62   Soil and water loan eligibility requirements.

    Subject to the restrictions listed in paragraph (d) of this 
section, an applicant is eligible for loan assistance if the following 
requirements are met:
    (a) * * *
    (4) Have the character (emphasizing credit history, past record of 
debt repayment and reliability), and industry necessary to carry out 
the proposed operation. Past record of debt repayment will not be cause 
for a determination that the applicant/borrower is not eligible if an 
honest attempt has been made to make the payment(s). If an applicant is 
delinquent on a Federal debt (other than a Farmer Program debt, in 
accordance with Sec. 1941.14 of subpart A of part 1941 of this 
chapter), it is automatically ineligible for loan assistance.
    (i) The County Office will use Form FmHA 1910-3, ``Record of Credit 
Alert Interactive Voice Response System (CAIVRS) Inquiry,'' to check 
the Department of Housing and Urban Development's CAIVRS to determine 
if the applicant is delinquent on a Federal debt. No decision to deny 
credit can be based solely on the results of the CAIVRS inquiry. If 
CAIVRS identifies a delinquent Federal debt, the County Office will 
immediately suspend processing of the application. The applicant will 
be notified that processing has been suspended and will be asked to 
contact the appropriate Federal agency, at the telephone number 
provided by CAIVRS, to resolve the delinquency. When the applicant 
provides FmHA with official documentation that the delinquency has been 
paid in full or otherwise resolved, processing of the application will 
be continued.
    (ii) If the applicant is delinquent on a Federal debt (other than a 
Farmer Program debt), and is unable to resolve the delinquency, the 
application will be rejected and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive this restriction upon specific 
determination that it is in the best interest of the Government to do 
so.
* * * * *
    (b) * * *
    (1) Have the character (emphasizing credit history, past record of 
debt repayment and reliability), and industry necessary to carry out 
the proposed operation. This requirement also must be met by the 
individual members, stockholders, partners, or joint operators. Past 
record of debt repayment will not be cause for a determination that the 
applicant/borrower is not eligible if an honest attempt has been made 
to make the payment(s). If the applicant (the entity or any of its 
members) is delinquent on a Federal debt (other than a Farmer Program 
debt, in accordance with Sec. 1941.14 of subpart A or part 1941 of this 
chapter), the entity is automatically ineligible for loan assistance.
    (i) The County Office will use Form FmHA 1910-3 to check the 
Department of Housing and Urban Development's CAIVRS to determine if 
the entity or any of its members is delinquent on a Federal debt. No 
decision to deny credit can be based solely on the results of the 
CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
County Office will immediately suspend processing of the application. 
The applicant will be notified that processing has been suspended and 
will be asked to contact the appropriate Federal agency, at the 
telephone number provided by CAIVRS, to resolve the delinquency. When 
the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (ii) If the applicant is delinquent on a Federal debt (other than a 
Farmer Program debt) and is unable to resolve the delinquency, the 
application will be rejected and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive this restriction upon specific 
determination that it is in the best interest of the Government to do 
so.
* * * * *
    (d) Restrictions. An applicant will be considered ineligible for 
loan assistance under any of the following circumstances. A decision to 
deny a loan for any of these reasons is not appealable.
    (1) In accordance with the Food Security Act of 1985 (Pub. L. 99-
198), after December 23, 1985, if an individual or any member, 
stockholder, partner, or joint operator of an entity is convicted under 
Federal or State law of planting, cultivating, growing, producing, 
harvesting, or storing a controlled substance (see 21 CFR part 1308, 
which is exhibit C of subpart A of part 1941 of this chapter (available 
in any FmHA office) for the definition of ``controlled substance'') 
prior to loan approval in any crop year, the individual or entity shall 
be ineligible for a loan for the crop year in which the individual or 
member, stockholder, partner, or joint operator of the entity was 
convicted and the four succeeding crop years. Applicants will attest on 
Form FmHA 410-1, ``Application for FmHA Service,'' that as individuals 
or that its members, if an entity, have not been convicted of such 
crimes after December 23, 1985.
    (2) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible for any Farmer 
Program loan until the judgment is paid in full or otherwise satisfied. 
FmHA loan funds may not be used to satisfy the judgment. Questions 
about whether or not a judgment is still outstanding should be directed 
to the Office of the General Counsel. The Administrator may waive this 
restriction upon specific determination that it is in the best interest 
of the Government to do so.

PART 1944--HOUSING

    19. The authority citation for Part 1944 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
2.23; 7 CFR 2.70.

Subpart A--Section 502 Rural Housing Loan Policies, Procedures, and 
Authorizations

    20. Section 1944.9 is amended by adding paragraph (f)(5) to read as 
follows:


Sec. 1944.9   Other eligibility requirements.

* * * * *
    (f) * * *
    (5) The loan approval official will check the Department of Housing 
and Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny credit can be based solely on the results of 
the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
loan approval official will immediately suspend processing of the 
application. The applicant will be notified that processing has been 
suspended and will be asked to contact the appropriate Federal agency, 
at the telephone number provided by CAIVRS, to resolve the delinquency. 
When the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued. An outstanding judgment obtained by 
the United States in a Federal Court (other than the United States Tax 
Court), which has been recorded, shall cause the applicant to be 
ineligible to receive any grant or loan until the judgment is paid in 
full or otherwise satisfied. FmHA loan funds may not be used to satisfy 
the judgment. Questions about whether or not a judgment is still 
outstanding should be directed to the Office of the General Counsel. If 
the judgment remains unsatisfied, or if the applicant is delinquent on 
a Federal debt and is unable to resolve the delinquency, the 
application will be rejected and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive the rejection upon specific 
determination that it is in the best interest of the Government to do 
so.

Subpart D--Farm Labor Housing Loan and Grant Policies, Procedures, 
and Authorizations

    21. Section 1944.157 is amended by adding paragraph (a)(10) to read 
as follows:


Sec. 1944.157  Eligibility requirements.

    (a) * * *
    (10) Not be delinquent on a Federal debt or have a judgment lien 
against its property for a debt owed the United States.
    (i) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny credit can be based solely on the results of 
the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
District Office will immediately suspend processing of the application. 
The applicant will be notified that processing has been suspended and 
will be asked to contact the appropriate Federal agency, at the 
telephone number provided by CAIVRS, to resolve the delinquency. When 
the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (ii) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive the rejection upon specific determination that 
it is in the best interest of the Government to do so.
    (iii) For the purposes of this paragraph, applicant is defined as 
the applicant entity. In the case of a limited partnership, the 
applicant entity and each general partner will be considered.
* * * * *

Subpart E--Rural Rental and Rural Cooperative Housing Loan 
Policies, Procedures, and Authorizations

    22. Section 1944.211 is amended by adding paragraph (a)(15) to read 
as follows:


Sec. 1944.211  Eligibility requirements.

    (a) * * *
    (15) Not be delinquent on a Federal debt or have a judgment lien 
against its property for a debt owed the United States.
    (i) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny credit can be based solely on the results of 
the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
District office will immediately suspend processing of the application. 
The applicant will be notified that processing has been suspended and 
will be asked to contact the appropriate Federal agency, at the 
telephone number provided by CAIVRS, to resolve the delinquency. When 
the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (ii) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive the rejection upon specific determination that 
it is in the best interest of the Government to do so.
    (iii) For the purposes of this paragraph, applicant is defined as 
the applicant entity. In the case of a limited partnership, the 
applicant entity and each general partner will be considered.
* * * * *

Subpart J--Section 504 Rural Housing Loans and Grants

    23. Section 1944.467 is amended by revising paragraph (c) to read 
as follows:


Sec. 1944.467  Processing applications.

* * * * *
    (c) Credit investigation. Credit reports will be used for all loans 
of more than $7,500, and will be ordered at no cost to the applicant in 
accordance with subpart B of part 1910 (available in any FmHA office). 
Credit reports will not be used for grant assistance or loans of $7,500 
or less. In all cases, before making a loan, the County Office will 
check the Department of Housing and Urban Development's Credit Alert 
Interactive Voice Response System (CAIVRS), following the Forms Manual 
Insert for Form FmHA 1910-3, ``Record of Credit Alert Interactive Voice 
Response System (CAIVRS) Inquiry,'' to determine if the applicant is 
delinquent on a Federal debt. No decision to deny credit can be based 
solely on the results of the CAIVRS inquiry. If CAIVRS identifies a 
delinquent Federal debt, the County Office will immediately suspend 
processing of the application. The applicant will be notified that 
processing has been suspended and will be asked to contact the 
appropriate Federal agency, at the telephone number provided by CAIVRS, 
to resolve the delinquency. When the applicant provides FmHA with 
official documentation that the delinquency has been paid in full or 
otherwise resolved, processing of the application will be continued. An 
outstanding judgment obtained by the United States in a Federal Court 
(other than the United States Tax Court), which has been recorded, 
shall cause the applicant to be ineligible to receive any grant or loan 
until the judgment is paid in full or otherwise satisfied. FmHA loan 
funds may not be used to satisfy the judgment. Questions about whether 
or not a judgment is still outstanding should be directed to the Office 
of the General Counsel. If the judgment remains unsatisfied, or if the 
applicant is delinquent on a Federal debt and is unable to resolve the 
delinquency, the application will be rejected and the applicant will be 
notified of its right for an appeal in accordance with subpart B of 
part 1900 of this chapter. The Administrator may waive the rejection 
upon specific determination that it is in the best interest of the 
Government to do so.
* * * * *

PART 1945--EMERGENCY

    24. The authority citation for part 1945 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
2.23; 7 CFR 2.70.

Subpart D--Emergency Loan Policies, Procedures, and Authorizations

    25. Section 1945.162 is amended in paragraph (b)(1) in the fourth 
sentence by changing the reference from ``INS Form G-641, `Application 
for Verification of Information from Immigration and Naturalization 
Records,''' to ``INS Form G-639, `Verification Request Form,''' and in 
the last sentence by changing the reference from ``INS Form G-641'' to 
``INS Form G-639,'' by revising the introductory text and paragraph 
(g), and by adding paragraph (n) to read as follows:


Sec. 1945.162  Eligibility requirements.

    Subject to the restrictions listed in paragraph (n) of this 
section, an applicant is eligible for loan assistance if the following 
requirements are met:
* * * * *
    (g) Training and experience. An applicant must have sufficient 
applicable training or farming experience in managing and operating a 
farm or ranch (1 year's complete production and marketing cycle within 
the last 5 years immediately preceding the application) which indicates 
the managerial ability necessary to assure reasonable prospects of 
success in the proposed plan of operation and have the character 
(emphasizing credit history, past record of debt repayment and 
reliability), and industry necessary to carry out the proposed 
operation. If an applicant is delinquent on a Federal debt (other than 
a Farmer Program debt, in accordance with Sec. 1941.14 of subpart A of 
part 1941 of this chapter), it is automatically ineligible for loan 
assistance.
    (1) The County Office will use Form FmHA 1910-3, ``Record of Credit 
Alert Interactive Voice Response System (CAIVRS) Inquiry,'' to check 
the Department of Housing and Urban Development's CAIVRS to determine 
if the applicant is delinquent on a Federal debt. No decision to deny 
credit can be based solely on the results of the CAIVRS inquiry. If 
CAIVRS identifies a delinquent Federal debt, the County Office will 
immediately suspend processing of the application. The applicant will 
be notified that processing has been suspended and will be asked to 
contact the appropriate Federal agency, at the telephone number 
provided by CAIVRS, to resolve the delinquency. When the applicant 
provides FmHA with official documentation that the delinquency has been 
paid in full or otherwise resolved, processing of the application will 
be continued.
    (2) If the individual applicant (or entity, or any member of the 
entity) is delinquent on a Federal debt (other than a Farmer Program 
debt), and is unable to resolve the delinquency, the application will 
be rejected and the applicant will be notified of its right for an 
appeal in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive this restriction upon specific determination 
that it is in the best interest of the Government to do so.
* * * * *
    (n) Restrictions. An applicant will be considered ineligible for 
loan assistance under any of the following circumstances. A decision to 
deny a loan for any of these reasons is not appealable.
    (1) In accordance with the Food Security Act of 1985 (Pub. L. 99-
198), after December 23, 1985, if an individual or any member, 
stockholder, partner, or joint operator of an entity is convicted under 
Federal or State law of planting, cultivating, growing, producing, 
harvesting, or storing a controlled substance (see 21 CFR part 1308, 
which is exhibit C of subpart A of part 1941 of this chapter (available 
in any FmHA office) for the definition of ``controlled substance'') 
prior to loan approval in any crop year, the individual or entity shall 
be ineligible for a loan for the crop year in which the individual or 
member, stockholder, partner, or joint operator of the entity was 
convicted and the four succeeding crop years. Applicants will attest on 
Form FmHA 410-1, ``Application for FMHA Services,'' that as individuals 
or that its members, if an entity, have not been convicted of such 
crimes after December 23, 1985.
    (2) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible for any Farmer 
Program loan until the judgment is paid in full or otherwise satisfied. 
FmHA loan funds may not be used to satisfy the judgment. Questions 
about whether or not a judgment is still outstanding should be directed 
to the Office of the General Counsel. The Administrator may waive this 
restriction upon specific determination that it is in the best interest 
of the Government to do so.

PART 1948--RURAL DEVELOPMENT

    26. The authority citation for Part 1948 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
2.23; 7 CFR 2.70.

Subpart B--Section 601--Energy Impacted Area Development Assistance 
Program

    27. Section 1948.54 is amended by designating the text as paragraph 
(a), and adding paragraph (b) to read as follows:


Sec. 1948.54  Eligible applicants.

* * * * *
    (b) The applicant must not be delinquent on a Federal debt.
    (1) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny assistance can be based solely on the results 
of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
the District Office will immediately suspend processing fo the 
application. The applicant will be notified that processing has been 
suspended and will be asked to contact the appropriate Federal agency, 
at the telephone number provided by CAIVRS, to resolve the delinquency. 
When the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (2) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive the rejection upon specific determination that 
it is in the best interest of the Government to do so.

Subpart C--Intermediary Relending Program (IRP)

    28. Section 1948.117 is amended by adding paragraph (d) to read as 
follows:


Sec. 1948.117  Other regulatory requirements.

* * * * *
    (d) The applicant must not be delinquent on a Federal debt.
    (1) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny assistance can be based solely on the results 
of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
the District Office will immediately suspend processing of the 
application. The applicant will be notified that processing has been 
suspended and will be asked to contact the appropriate Federal agency, 
at the telephone number provided by CAIVRS, to resolve the delinquency. 
When the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (2) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter.
    The Administrator may waive the rejection upon specific 
determination that it is in the best interest of the Government to do 
so.
    29. Section 1948.128 is amended by redesignating paragraph (d) as 
paragraph (e), and adding a new paragraph (d) to read as follows:


Sec. 1948.128  Requests to make loans to ultimate recipients.

* * * * *
    (d) If the ultimate recipient is a partnership or for-profit 
corporation, the intermediary will provide certifications from each 
general partner or stockholder owning a 10 percent or more interest as 
to whether it is delinquent on any Federal debt or has a judgment lien 
against its property for a debt owed the United States.
* * * * *

PART 1951--SERVICING AND COLLECTIONS

    30. The authority citation for Part 1951 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
2.23; 7 CFR 2.70.

Subpart E--Servicing of Community and Insured Business Programs 
Loans and Grants

    31. Section 1951.230 is amended by adding paragraph (a)(13) to read 
as follows:


Sec. 1951.230  Transfer of security and assumption of loans.

    (a) * * *
    (13) The transferee must not be delinquent on a Federal debt or 
have a Federal judgment lien against its property.
    (i) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the transferee is delinquent on a Federal 
debt. No decision to deny assistance can be based solely on the results 
of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
the District Office will immediately suspend processing of the 
application. The transferee will be notified that processing has been 
suspended and will be asked to contact the appropriate Federal agency, 
at the telephone number provided by CAIVRS, to resolve the delinquency. 
When the transferee provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (ii) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the transferee to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the transferee is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the transferee will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive the rejection upon specific determination that 
it is in the best interest of the Government to do so.
* * * * *

PART 1980--GENERAL

    32. The authority citation for part 1980 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
2.23; 7 CFR 2.70.

Subpart B--Farmer Program Loans

    33. Section 1980.175 is amended in paragraphs (b)(1)(i) and 
(b)(2)(iv)(A) in the fourth sentence by changing the reference from 
``INS Form G-641, `Application for Verification of Information from 
Immigration and Naturalization Records,''' to ``INS Form G-639, 
`Verification Request Form,''' and in the last sentence by changing the 
reference from ``INS Form G-641'' to ``INS Form G-639,'' by revising 
the introductory text of paragraph (b), by revising paragraphs 
(b)(1)(iv), (b)(1)(v), (b)(2)(iv)(C) and (b)(2)(iv)(D), and by adding 
paragraph (b)(3) to read as follows:


Sec. 1980.175  Operating loans.

* * * * *
    (b) Loan eligibility requirements. Subject to the restrictions 
listed in paragraph (b)(3) of this section, an applicant is eligible 
for loan assistance if the following requirements are met:
    (1) * * *
    (iv) Have the character (emphasizing credit history, past record of 
debt repayment and reliability), and industry to carry out the proposed 
operation. Past record of debt repayment will not be cause for a 
determination that the applicant is not eligible if an honest attempt 
has been made to meet the obligation. If an applicant is delinquent on 
a Federal debt (other than a Farmer Program debt, in accordance with 
Sec. 1941.14 of subpart A of part 1941 of this chapter), it is 
automatically ineligible for loan assistance.
    (A) The County Office will use Form FmHA 1910-3, ``Record of Credit 
Alert Interactive Voice Response System (CAIVRS) Inquiry,'' to check 
the Department of Housing and Urban Development's CAIVRS to determine 
if the applicant is delinquent on a Federal debt. No decision to deny 
credit can be based solely on the results of the CAIVRS inquiry. If 
CAIVRS identifies a delinquent Federal debt, the County Office will 
immediately suspend processing of the application. The applicant will 
be notified that processing has been suspended and will be asked to 
contact the appropriate Federal agency, at the telephone number 
provided by CAIVRS, to resolve the delinquency. When the applicant 
provides FmHA with official documentation that the delinquency has been 
paid in full or otherwise resolved, processing of the application will 
be continued.
    (B) If the applicant is delinquent on a Federal debt (other than a 
Farmer Program debt), and is unable to resolve the delinquency, the 
application will be rejected and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive this restriction upon specific 
determination that it is in the best interest of the Government to do 
so.
    (v) Honestly endeavor to carry out the applicant's/borrower's 
undertakings and obligations. This would include, but is not limited 
to, providing current, complete, and truthful information when applying 
for assistance and making every reasonable effort to meet the 
conditions and terms of the proposed loan.
* * * * *
    (2) * * *
    (iv) * * *
    (C) They and the entity itself must have the character (emphasizing 
credit history, past record of debt repayment and reliability), and 
industry to carry out the proposed operation. Past record of debt 
repayment will not be cause for a determination that the applicant is 
not eligible if an honest attempt has been made to meet the obligation. 
If the applicant (the entity or any of its members) is delinquent on a 
Federal debt (other than a Farmer Program debt, in accordance with 
Sec. 1941.14 of subpart A of part 1941 of this chapter), it is 
automatically ineligible for loan assistance.
    (1) The County Office will use Form FmHA 1910-3 to check the 
Department of Housing and Urban Development's CAIVRS to determine if 
the applicant is delinquent on a Federal debt. No decision to deny 
credit can be based solely on the results of the CAIVRS inquiry. If 
CAIVRS identifies a delinquent Federal debt, the County Office will 
immediately suspend processing of the application. The applicant will 
be notified that processing has been suspended and will be asked to 
contact the appropriate Federal agency, at the telephone number 
provided by CAIVRS, to resolve the delinquency. When the applicant 
provides FmHA with official documentation that the delinquency has been 
paid in full or otherwise resolved, processing of the application will 
be continued.
    (2) If the applicant is delinquent on a Federal debt (other than a 
Farmer Program debt) and is unable to resolve the delinquency, the 
application will be rejected and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive this restriction upon specific 
determination that it is in the best interest of the Government to do 
so.
    (D) They and the entity itself will honestly endeavor to carry out 
the applicant's/borrower's undertakings and obligations. This would 
include, but is not limited to, providing current, complete, and 
truthful information when applying for assistance and making every 
reasonable effort to meet the conditions and terms of the proposed 
loan.
* * * * *
    (3) Restrictions. An applicant will be considered ineligible for 
loan assistance under any of the following circumstances. A decision to 
deny a loan for any of these reasons is not appealable.
    (i) In accordance with the Food Security Act of 1985 (Pub. L. 99-
198) after December 23, 1985, if an individual or any member, 
stockholder, partner, or joint operator of an entity is convicted under 
Federal or State law of planting, cultivating, growing, producing, 
harvesting or storing a controlled substance (see 21 CFR part 1308, 
which is exhibit C of subpart A of part 1941 of this chapter (available 
in any FmHA office) for the definition of ``controlled substance'') 
prior to loan approval in any crop year, the individual or entity shall 
be ineligible for a loan for the crop year in which the individual or 
member, stockholder, partner, or joint operator of the entity was 
convicted and the four succeeding crop years. Applicants will attest on 
Form FmHA 410-1, ``Application for FmHA Services,'' that as individuals 
or that its members, if an entity, have not been convicted of such 
crimes after December 23, 1985.
    (ii) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible for any Farmer 
Program loan or loan guarantee until the judgment is paid in full or 
otherwise satisfied. FmHA loan funds may not be used to satisfy the 
judgment. Questions about whether or not a judgment is still 
outstanding should be directed to the Office of the General Counsel. 
The Administrator may waive this restriction upon specific 
determination that it is in the best interest of the Government to do 
so.
* * * * *
    34. Section 1980.185 is amended in paragraphs (b)(1)(i) and 
(b)(2)(iii) in the fourth sentence by changing the reference from ``INS 
Form G-641, `Application for Verification of Information from 
Immigration and Naturalization Records,''' to ``INS Form G-639, 
`Verification Request Form,''' and in the last sentence by changing the 
reference from ``INS Form G-641'' to ``INS Form G-639,'' by revising 
the introductory text of paragraph (b), by revising paragraphs 
(b)(1)(iv), (b)(1)(v), (b)(2)(i) and (b)(2)(ii), and by adding 
paragraph (b)(3) to read as follows:


Sec. 1980.185  Soil and Water loans.

* * * * *
    (b) Soil and Water loan eligibility requirements. Subject to the 
restrictions listed in paragraph (b)(3) of this section, an applicant 
is eligible for loan assistance if the following requirements are met:
    (1) * * *
    (iv) Have the character (emphasizing credit history, past record of 
debt repayment and reliability) and industry to carry out the proposed 
operation. Past record of debt repayment will not be cause for a 
determination that the applicant is not eligible if an honest attempt 
has been made to meet the obligation. If an applicant (the entity or 
any of its members) is delinquent on a Federal debt (other than a 
Farmer Program debt, in accordance with Sec. 1941.14 of subpart A of 
part 1941 of this chapter), it is automatically ineligible for loan 
assistance.
    (A) The County Office will use Form FmHA 1910-3 to check the 
Department of Housing and Urban Development's CAIVRS to determine if 
the applicant is delinquent on a Federal debt. No decision to deny 
credit can be based solely on the results of the CAIVRS inquiry. If 
CAIVRS identifies a delinquent Federal debt, the County Office will 
immediately suspend processing of the application. The applicant will 
be notified that processing has been suspended and will be asked to 
contact the appropriate Federal agency, at the telephone number 
provided by CAIVRS, to resolve the delinquency. When the applicant 
provides FmHA with official documentation that the delinquency has been 
paid in full or otherwise resolved, processing of the application will 
be continued.
    (B) If the applicant is delinquent on a Federal debt (other than a 
Farmer Program debt), and is unable to resolve the delinquency, the 
application will be rejected and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive this restriction upon specific 
determination that it is in the best interest of the Government to do 
so.
    (v) Honestly endeavor to carry out the applicant's/borrower's 
undertakings and obligations. This would include, but is not limited 
to, providing current, complete, and truthful information when applying 
for assistance and making every reasonable effort to meet the 
conditions and terms of the proposed loan.
* * * * *
    (2) * * *
    (i) Along with all of its members, stockholders, partners, or joint 
operators have the character (emphasizing credit history, past record 
of debt repayment and reliability) and industry to carry out the 
proposed operation. Past record of debt repayment will not be cause for 
a determination that the applicant is not eligible if an honest attempt 
has been made to meet the obligation. If the applicant (the entity or 
any of its members) is delinquent on a Federal debt (other than a 
Farmer Program debt, in accordance with Sec. 1941.14 of subpart A of 
part 1941 of this chapter), it is automatically ineligible for loan 
assistance.
    (A) The County Office will use Form FmHA 1910-3 to check the 
Department of Housing and Urban Development's CAIVRS to determine if 
the applicant is delinquent on a Federal debt. No decision to deny 
credit can be based solely on the results of the CAIVRS inquiry. If 
CAIVRS identifies a delinquent Federal debt, the County Office will 
immediately suspend processing of the application. The applicant will 
be notified that processing has been suspended and will be asked to 
contact the appropriate Federal agency, at the telephone number 
provided by CAIVRS, to resolve the delinquency. When the applicant 
provides FmHA with official documentation that the delinquency has been 
paid in full or otherwise resolved, processing of the application will 
be continued.
    (B) If the applicant is delinquent on a Federal debt (other than a 
Farmer Program debt) and is unable to resolve the delinquency, the 
application will be rejected and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive this restriction upon specific 
determination that it is in the best interest of the Government to do 
so.
    (ii) Along with all of its members, stockholders, partners or joint 
operators, honestly endeavor to carry out the applicant's/borrower's 
undertakings and obligations. This would include, but is not limited 
to, providing current, complete, and truthful information when applying 
for assistance and making every reasonable effort to meet the 
conditions and terms of the proposed loan.
* * * * *
    (3) Restrictions. An applicant will be considered ineligible for 
loan assistance under any of the following circumstances. A decision to 
deny a loan for any of these reasons is not appealable.
    (i) In accordance with the Food Security Act of 1985 (Pub. L. 99-
198) after December 23, 1985, if an individual or any member, 
stockholder, partner, or joint operator of an entity is convicted under 
Federal or State law of planting, cultivating, growing, producing, 
harvesting or storing a controlled substance (see 21 CFR part 1308, 
which is exhibit C of subpart A of part 1941 of this chapter (available 
in any FmHA office) for the definition of ``controlled substance'') 
prior to loan approval in any crop year, the individual or entity shall 
be ineligible for a loan for the crop year in which the individual or 
member, stockholder, partner, or joint operator of the entity was 
convicted and the four succeeding crop years. Applicants will attest on 
Form FmHA 410-1, ``Application for FmHA Services,'' that as individuals 
or that its members, if an entity, have not been convicted of such 
crimes after December 23, 1985.
    (ii) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible for any Farmer 
Program loan until the judgment is paid in full or otherwise satisfied. 
FmHA loan funds may not be used to satisfy the judgment. Questions 
about whether or not a judgment is still outstanding should be directed 
to the Office of the General Counsel. The Administrator may waive this 
restriction upon specific determination that it is in the best interest 
of the Government to do so.
* * * * *

Subpart E--Business and Industrial Loan Program

    35. Section 1980.406 is added to read as follows:


Sec. 1980.406  Delinquency on a Federal debt.

    (a) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny credit can be based solely on the results of 
the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
District Office will immediately suspend processing of the application. 
The applicant will be notified that processing has been suspended and 
will be asked to contact the appropriate Federal agency, at the 
telephone number provided by CAIVRS, to resolve the delinquency. When 
the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (b) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant, loan or loan guarantee until the judgment is paid in full or 
otherwise satisfied. FmHA loan funds may not be used to satisfy the 
judgment. Questions about whether or not a judgment is still 
outstanding should be directed to the Office of the General Counsel. If 
the judgment remains unsatisfied, or if the applicant is delinquent on 
a Federal debt and is unable to resolve the delinquency, the 
application will be rejected and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive the rejection upon specific 
determination that it is in the best interest of the Government to do 
so.

Subpart G--Nonprofit National Corporations Loan and Grant Program

    36. Section 1980.606 is amended by adding paragraph (f) to read as 
follows:


Sec. 1980.606   NNC eligibility.

* * * * *
    (f) Not be delinquent on a Federal Debt. This applies to both the 
applicant and the ultimate recipients that are to be funded from 
Federal funds.
    (1) The National Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny assistance can be based solely on the results 
of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
the National Office will immediately suspend processing of the 
application. The applicant will be notified that processing has been 
suspended and will be asked to contact the appropriate Federal agency, 
at the telephone number provided by CAIVRS, to resolve the delinquency. 
When the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (2) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant, loan or loan guarantee until the judgment is paid in full or 
otherwise satisfied. FmHA loan funds may not be used to satisfy the 
judgment. Questions about whether or not a judgment is still 
outstanding should be directed to the Office of the General Counsel. If 
the judgment remains unsatisfied, or if the applicant is delinquent on 
a Federal debt and is unable to resolve the delinquency, the 
application will be rejected and the applicant will be notified of its 
right for an appeal in accordance with subpart B of part 1900 of this 
chapter. The Administrator may waive the rejection upon specific 
determination that it is in the best interest of the Government to do 
so.

Subpart I--Community Programs Guaranteed Loans

    37. Section 1980.851 is amended by adding paragraph (a)(1)(vii) to 
read as follows:


Sec. 1980.851  Processing applications.

    (a) * * *
    (1) * * *
    (vii) Determination of delinquency on a Federal debt.
    (A) The District Office will check the Department of Housing and 
Urban Development's Credit Alert Interactive Voice Response System 
(CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
Inquiry,'' to determine if the applicant is delinquent on a Federal 
debt. No decision to deny credit can be based solely on the results of 
the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
District Office will immediately suspend processing of the application. 
The applicant will be notified that processing has been suspended and 
will be asked to contact the appropriate Federal agency, at the 
telephone number provided by CAIVRS, to resolve the delinquency. When 
the applicant provides FmHA with official documentation that the 
delinquency has been paid in full or otherwise resolved, processing of 
the application will be continued.
    (B) An outstanding judgment obtained by the United States in a 
Federal Court (other than the United States Tax Court), which has been 
recorded, shall cause the applicant to be ineligible to receive any 
grant or loan until the judgment is paid in full or otherwise 
satisfied. FmHA loan funds may not be used to satisfy the judgment. 
Questions about whether or not a judgment is still outstanding should 
be directed to the Office of the General Counsel. If the judgment 
remains unsatisfied, or if the applicant is delinquent on a Federal 
debt and is unable to resolve the delinquency, the application will be 
rejected and the applicant will be notified of its right for an appeal 
in accordance with subpart B of part 1900 of this chapter. The 
Administrator may waive the rejection upon specific determination that 
it is in the best interest of the Government to do so.
* * * * *
    Dated: April 7, 1994.
Bob Nash,
Under Secretary for Small Community and Rural Development.
[FR Doc. 94-10618 Filed 5-3-94; 8:45 am]
BILLING CODE 3410-07-U