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for appointment by state committees are not acceptable to the Secretary of Agriculture, other persons shall be endorsed by state committees. The Secretary of Agriculture shall issue notices of appointment and designate the committee chairmen.
In the event that persons appointed to membership on county committees by the Secretary of Agriculture decline to accept such appointment, the Secretary may appoint others remaining on the list, or may request endorsement of additional nominees.
All persons nominated for appointment as members of county committees shall be bona fide farmers residing on farms and deriving their income principally from farming. At least four of the twelve persons nominated by the county rural rehabilitation supervisor and the county agricultural agent for the consideration of state committees shall have been tenant farmers experienced in operating family-size farms, and at least two of the persons endorsed by State committees for the consideration of the Secretary of Agriculture shall have been tenant farmers experienced in operating family-size farms. The term of appointment shall be to December 31, 1938. When new committees are appointed, it is the purpose to include on such committees one or more tenant farmers to whom purchase loans have been made.
In addition to performing the functions specified in section 2 of Title I of the Bankhead-Jones Farm Tenant Act, (50 Stat. 523; 7 U.S.C., Sup., 1002) the county committee may also serve as the county Farm-Debt Adjustment committee, and as the county Rehabilitation Advisory committee, thus concentrating all county advisory functions of the Farm Security Administration in a single committee, Provided, however, That compensation and reimbursement of county committee members from funds appropriated under the authority of Title I of the Bankhead-Jones Farm Tenant Act, shall be limited to payment for services rendered in connection with carrying out the provisions of the title.*† [Par. I 4]
303.3 Allocation of loan funds to States and Counties. Funds for loans to enable eligible farmers to acquire farms shall be distributed to the respective States on the basis of farm population and the prevalence of tenancy.
During the fiscal year 1937-1938, the number of Counties in which loans shall be made shall be limited to approximately 300 and the number of loans per county shall not be less than five, nor more than ten (except in States in which the total number of loans shall be less than five). If appropriations are made as authorized during the fiscal years 1938-1939 and 1939-1940, it will be possible to extend the loaning program into additional Counties on the basis of farm population and prevalence of tenancy.
Within each State the particular Counties in which loans are to be made during each fiscal year shall be determined by the Secretary of Agriculture with the advice of the State Farm Security Advisory committee, which committee shall take into account data on farm population and prevalence of tenancy submitted by the Secretary of Agriculture. [Par. II]
**For statutory and source citations, see note to § 303.1.
303.4 Selection of applicants. (a) Each applicant for a tenant purchase loan shall be required to submit a statement certifying to the following: (1) His age, marital status, and number of dependents. (2) That he is a citizen of the United States. (3) That he is or has been recently engaged in farming as a means of providing the major portion of the family income, as farm tenant, farm laborer, sharecropper, or recent owner. (4) That he is unable to obtain an adequate loan under reasonable terms for the purchase of a farm from other sources. (5) That in case he obtains a loan for the purchase of a farm, he will co-operate with representatives of the Farm Security Administration in developing and carrying out a sound Farm and Home Management Plan and maintaining such records and accounts as may be required until his debt is repaid. (6) Whether he is able to make an initial down payment and, if so, in what amount. (7) Whether he owns livestock and farm implements necessary successfully to carry on farming operations on a family-sized farm.
(b) In a given county, the committee shall, with the aid of its secretary, and with the advice of the county agricultural agent, select from among all the applicants those to whom loans can be made and, in the process of selection, the committee shall be guided by the following criteria: (1) The family must have a reputation for paying its debts and meeting its responsibilities. (2) The family must have shown reasonable stability of residence. (3) The family should have demonstrated in the past acceptable evidence of initiative and resourcefulness and successful farming ability and managerial capacity. (4) The family must be free from physical disabilities or infectious diseases that are likely to obstruct fulfillment of the obligations to be assumed. (5) The operator or family head must be unable to obtain an adequate loan for the purchase of a farm through private or governmental sources, other than the Farm Security Administration. (6) The family as a whole should desire the opportunity being made available and both husband and wife should so indicate by signing the application form. (7) There should be no discrimination based on nationality, race, creed, or political affiliation.* [Par. III]
303.5 Selection of farms. Within the price limit specified for farms to be purchased in a given county, each successful applicant for a purchase loan shall be given large latitude in the selection of the farm which he desires to purchase, but each farm proposed for purchase shall be examined and appraised by the county committee and the committee shall be satisfied that the farm with respect to which the application is made is of such character that there is a reasonable likelihood that the making of a loan with respect thereto will carry out the purposes of Title I of the Bankhead-Jones Farm Tenant Act, (50 Stat. 522; 7 U.S.C., Sup., 1000-1006), and shall be further satisfied that considered from the standpoint of price, location, topography, soil type, fertility, and past history of production, the applicant has made a relatively good selection within the county.** [Par. IV]
**For statutory and source citations, see note to § 303.1.
SUBPART-LOANS TO INDIVIDUALS FOR RURAL REHABILITATION
303.21 General policies. It is the policy of the Farm Security Administration:
To make farm families self-supporting on a basis consistent with acceptable standards and local conditions by means of loans based upon Farm and Home Management Plans approved by the Farm Security Administration.
To require all applicants for loans to obtain their necessary financing or refinancing from agencies other than the Farm Security Administration whenever they can obtain such financing or refinancing and can get it on reasonable terms.
To take a first lien on property which is adequate to secure all new loans made, including renewal of existing loans. It is not the policy of the Farm Security Administration to subordinate new or existing loans to liens of other creditors. Exceptions to this policy will be made only upon the approval of the regional director on individual
To make loans under this subpart to eligible persons only on the basis of regular Farm and Home Management Plans accepted by the Farm Security Administration. This policy requires that all active cases now or hereafter to be on the rolls of the Farm Security Administration for whom regular Farm and Home Management Plans have not been accepted by the Farm Security Administration, will, until further notice, be treated as emergency rehabilitation cases in conformity with §§ 321.1-321.4, and Administration Instruction 57 (Revision 1), August 13, 1936.
Not to make loans to individual borrowers for the purpose of refinancing real property mortgages. This policy is not to be construed as modifying the purposes for which loans may be made to individuals for participation in community and cooperative services, as set forth in § 303.71. [Par. 2]
*§§ 303.21 to 303.160, inclusive, issued under the authority contained in the Emergency Relief Appropriation Act in effect at the time of issuance, sec. 6, 49 Stat. 118, 49 Stat. 1609, sec. 2 (a), 50 Stat. 354; 15 U.S.C., Sup., 728. The authority delegated to the President by these statutes has been redelegated by him in the Executive orders listed in note to § 301.1.
†The source of §§ 303.21 to 303.30, inclusive, (except for the amendments noted in the text,) is Administration order 41, rev. 1, Resettlement Administration, Dec. 21, 1935.
303.22 Persons eligible. Farm owners, farm tenants, sharecroppers, farm laborers, or persons who, when last employed, obtained the major portion of their livelihood from farming operations, who are or may hereafter be certified as eligible for public aid and referred to the Farm Security Administration by Central Application Bureaus or other agencies authorized to determine need for public aid (including county rural rehabilitation advisory committees in areas not otherwise adequately served), and persons now on the official rolls of the Farm Security Administration as standard rehabilitation and emergency rehabilitation cases classified in accordance with Administration Instruction 138, February 8, 1938, will be eligible to receive loans under this subpart, subject to the following conditions: (a) Loans may be made to such persons, as far as allotted funds per
mit, if they evidence an acceptable initiative and resourcefulness, managerial capacity, and promise of ability to profit from instruction and guidance; (b) if the soil resources available to them, or which are to be made available, promise a satisfactory return on human labor intelligently applied; and (c) if there is a reasonable probability of the successful outcome of regular Farm and Home Management Plans designed for them in accordance with the following policies: Farm and Home Management Plans will be designed so that the farm will make the largest possible contribution to the family living throughout the year in vegetables and fruits, dairy products, eggs and poultry, meats and cereals, and fuel; Farm and Home Management Plans will be designed to incorporate an economy which promises sufficient cash income to provide economic stability and liquidation of obligations to the Farm Security Administration and to other creditors.** [Par. 4a]
303.23 Special cases. Authority is hereby given to regional directors of the Farm Security Administration to make loans for rural rehabilitation to other persons who are heads of farm families, provided that such loans are consistent with the purpose of this subpart, and within the limitations of Executive Order 7143, August 19, 1935, and subsequent amendments thereto.** [Par. 4b]
303.24 Purposes for which loans may be made and periods of such loans. Loans may be made for the following purposes for a period not to exceed 5 years: (Goods acquired by purchase, or retained by refinancing, from the proceeds of loans made under these purposes will be construed as "recoverable goods" for the purpose of this subpart.)
Purchase of horses, mules, cattle, sows, sheep, or other livestock and poultry whose useful life is expected to exceed 2 years.
Construction and major repairs of buildings and fences.
Refinancing of chattel mortgages and other liens on personal property, when it is found impossible to make other equitable adjustments and when the amount is more than should be considered an annual instalment.
Other farm improvements essential to the successful operation of the approved Farm and Home Management Plan and the rehabilitation of the family.
The purchase of lime or fertilizers or the seeding of land to permanent pasture or meadow, the benefits of which will be spread over a number of years but the cost of which may reasonably be expected to be repaid within 5 years out of the increased productivity of the land; Provided, That no such loan shall be made to any tenant whose lease will expire before the date of the repayment of the loan unless said tenant has a contract with his landlord under the terms of which he will be adequately compensated for the unaccrued residual value of the fertilizer applied or seeding to pasture or meadow. (Loans for the purchase of feed, seed, fertilizer and other seasonal farm supplies, the benefits of which will largely accrue within a 2-year period, should be repayable in a period less than 2 years.)
**For statutory and source citations, see note to § 303.21.
Loans may be made for the following purposes for a period less than two years: (Goods acquired by purchase, or retained by refinancing, from the proceeds of loans made under these purposes will be construed as "nonrecoverable goods" for the purpose of this subpart.)
Purchase of feed, seed, fertilizer, and other seasonal farm supplies. Minor repairs to buildings and fences, repairs to farm machinery and household equipment, and the purchase of farm tools.
Payment of rent on land and buildings.
Payment of recording and filing fees, labor, professional and transportation services, and other fees and services, including utility services.
Purchase of baby chicks, feeder pigs, or other livestock of a character that will be consumed or marketed in less than 2 years.
Purchase of food, fuel, clothing, and other subsistence goods for human needs, and payment of indispensable medical services. Payment of premiums for property insurance.
Payment of interest on chattel mortgages or other liens on personal property.
Payment of annual instalments on chattel mortgages or other liens against personal property.
Payment of taxes on real and personal property.
Loans will be made for the shortest period consistent with the purpose of this subpart, considering the use to which the proceeds of the loan are to be put, the useful life of the goods to be purchased, and the resources and earning capacity of the borrower.* [Par. 4c, A.O. 41, rev. 1, Dec. 21, 1935, as amended by Supp. 6, May 25, 1937]
303.25 Amortization and rate of interest. Interest will be charged at the rate of 5 percent per annum on all new loans and renewals granted under the provisions of this subpart.
Loans for nonrecoverable goods will be repayable in less than 2 years in such instalments as the regional director will determine to be in accordance with the anticipated maximum ability of the borrower to repay, or in accordance with the provisions of the Farm and Home Management Plan approved for the borrower.
Loans for recoverable goods will be repayable within a period not to exceed 5 years. Provisions may be made for repayments in such instalments as the regional director may determine to be in accordance with the anticipated maximum ability of the borrower to repay or in accordance with the provisions of the Farm and Home Management Plan approved for the borrower, Provided only That the total repayments required during each year will be the same for each of the years for which such loan is made. However, when the borrower is subject to one or more of the conditions of financial stress listed below and the loan is made for a period of 5 years, the first two annual payments on the principal may be deferred in case of: (Interest, however, will be payable during the first 2 years. During the third, fourth, and fifth years the loan will be amortized by payments of principal with interest, Provided only That the total repayments required during each of the three years will be the same for each of the 3 years, during which such repayments are made.)
*For statutory citation, see note to § 303.21.