Farm Loan Programs Account Servicing Policies-Reduction of Amortized Shared Appreciation Recapture Amortization Rate

The Farm Service Agency (FSA) is amending its regulations to reduce the amortization rate on Shared Appreciation Agreement recapture and clarify the references made to Shared Appreciation (SA) loans. Pursuant to statutory mandate, the amortization rate on all future (SA) payment agreements will be the current Homestead Protection Program interest rate less 100 basis points (1 percent). In addition, the amortization rate on all SA payment agreements in existence as of October 28, 2000, will be similarly reduced. Additionally, SA loans will now be referred to as SA amortized payments and the Promissory Notes used in the amortization of these amounts will be referred to as payment agreements. This change is being made to clarify the fact that SA agreements are an amortization of an existing debt which is not derived from obligated loan funds.