Common use of Conditions of Guarantee Clause in Contracts

Conditions of Guarantee. A loan guarantee under this part will be evidenced by a Loan Note Guarantee issued by the Agency. Each lender will also execute a Lender’s Agreement. (a) The entire loan will be secured by the same security with equal lien pri- ority for the guaranteed and non-guar- anteed portions of the loan. The non- guaranteed portion of the loan will not be paid first nor given any preference or priority over the guaranteed por- tion. (b) The lender will be responsible for servicing the entire loan and will re- main mortgagee or secured party of record notwithstanding the fact that another party may hold a portion of the loan. (c) When a guaranteed portion of a loan is sold to a holder, the holder shall have all rights of the lender under the Loan Note Guarantee to the extent of the portion purchased. The lender will remain bound by all the obliga- tions under the Loan Note Guarantee, Lender’s Agreement, and Agency pro- gram regulations. If the Agency makes a payment to a holder, then the lender must reimburse the Agency. (d) A lender will receive all payments of principal and interest on the ac- count of the entire loan and will promptly remit to each holder a pro rata share, less any lender servicing fee. (e) The lender may retain all of the unguaranteed portion of the loan or may sell part of the unguaranteed por- tion of the loan through participation. However, the lender is required to re- tain 5 percent of the loan amount from the unguaranteed portion in their port- folio.

Conditions of Guarantee. A loan guarantee under this part will be evidenced by a Loan Note Guarantee issued by the Agency. Each lender will also execute a Lender’s Agreement. (a) The entire loan will be secured by the same security with equal lien pri- ority for the guaranteed and non-guar- anteed portions of the loan. The non- guaranteed portion of the loan will not be paid first nor given any preference or priority over the guaranteed por- tion. (b) The lender will be responsible for servicing the entire loan and will re- main mortgagee or secured party of record notwithstanding the fact that another party may hold a portion of the loan. (c) When a guaranteed portion of a loan is sold to a holder, the holder shall have all rights of the lender under the Loan Note Guarantee to the extent of the portion purchased. The lender will remain bound by all the obliga- tions under the Loan Note Guarantee, Lender’s Agreement, and Agency pro- gram regulations. If the Agency makes a payment to a holder, then the lender must reimburse the Agency. (d) A lender will receive all payments of principal and interest on the ac- count of the entire loan and will promptly remit to each holder a pro rata share, less any lender servicing fee. (e) The lender may retain all of the unguaranteed portion of the loan or may sell part of the unguaranteed por- tion of the loan through participation. However, the lender is required to re- tain 5 percent of the loan amount from the unguaranteed portion in their port- folio. Upon request by the Agency, the lender will permit representatives of the Agency (or other agencies of the U.S. Department of Agriculture au- thorized by that Department or the U.S. Government) to inspect and make copies of any of the records of the lend- er pertaining to the guaranteed loans. Such inspection and copying may be made during regular office hours of the lender or at any other time the lender and the Agency agree upon.