§2006f Rural development certified lenders program

Summary

The Secretary may set up a program to guarantee loans that are made by lenders the Secretary certifies. A lender can be certified only if it meets rules the Secretary writes, including the ability to make, service, and handle trouble loans. The Secretary can require certified lenders to use loan‑servicing standards at least as strict as those used by careful commercial or cooperative lenders. The Secretary can guarantee up to 80 percent of a loan from a certified lender if the borrower meets eligibility rules. The Secretary may let certified lenders certify things like creditworthiness, repayment ability, collateral, feasibility, and that the borrower follows the law, but the Secretary still must check eligibility and review the application. The Secretary can also create a preferred certified lenders program for lenders with extra experience and knowledge of the program and rules. Preferred status can be lost for not following rules or for higher loss rates, but losing that status does not cancel existing guarantees. Preferred lenders must meet the same strict servicing standards, and the Secretary will monitor them at least once a year. For loans from preferred lenders, the Secretary may guarantee up to 80 percent and may let those lenders make loan decisions and accept certifications about borrower compliance.