Implementation of Preferred Lender Program and Streamlining of Guaranteed Loan Regulations

This action amends the regulations governing the Farm Service Agency's (FSA) guaranteed farm loan programs. It clarifies, simplifies, and streamlines the procedures to apply for, make, and service FSA guaranteed loans. This action also establishes the Preferred Lender Program. This action also provides for an Interest Assistance Program to replace the former interest rate buydown program (IRBD). The intended effect of this rule is to clarify and simplify the rules, and to finalize the interim rule which implemented the provisions of the Omnibus Budget Reconciliation Act of 1990. As contained in the final rule, FSA grants interest assistance at a 4 percent subsidy rate in all situations that qualify for interest assistance. FSA is requesting comments on alternative methods of determining the amount of subsidy paid, including granting interest assistance at incremental rates based upon the borrower's needs. FSA is also incorporating changes mandated by Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations Act, 1999, (1999 Act), signed on October 21, 1998.