# Conditions of Guarantee
> **Rural Utilities Service** · Direct final rule. · Published 2011-07-19 · Effective 2011-09-02 · 76 FR 42469
## Document
- **Document number:** 2011-18010
- **Category:** rural-development
- **Sub-agency:** Rural Utilities Service
- **Federal Register citation:** 76 FR 42469
- **CFR reference:** 7 CFR 4279
- **Publication date:** 2011-07-19
- **Effective date:** 2011-09-02
## Abstract

The Rural Business-Cooperative Service is amending its regulations for the Business and Industry Guaranteed Loan Program to ensure the Agency has sufficient right(s) for reimbursement when an Agency guaranteed portion of a loan is sold to a holder. This action is necessary because the rule is not sufficiently clear that the use of loan funds for purposes not approved by the Agency is a reason to find the guarantee unenforceable regardless of whether the guaranteed portion of the loan has been sold to a holder. This action ensures the Agency has sufficient rights for reimbursement when an Agency guaranteed portion of the loan is sold to a holder.

## Source
- [Federal Register document](https://www.federalregister.gov/documents/2011/07/19/2011-18010/conditions-of-guarantee)
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