Farm Loan Programs Account Servicing Policies-Servicing Shared Appreciation Agreements

This action amends the terms and servicing of Shared Appreciation Agreements. This final rule allows the remaining contributory value of capital improvements made during the term of the Shared Appreciation Agreement to be deducted when calculating the recapture amount under the agreement, reduces the maturity period of such agreements executed after the effective date of this issuance from 10 years to 5 years, and reduces the interest rate on Shared Appreciation loans from the Non-program loan rate to the Farm Loan Program Homestead Protection rate. These changes will give borrowers an opportunity to repay a portion of the Farm Service Agency (FSA) debt that was written off, while ensuring that the Government promptly recaptures some appreciation of the collateral. This rule also will encourage improvement of Agency security during the term covered by the Shared Appreciation Agreement.