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To care for the emergency rehabilitation needs of eligible persons within the limits of available funds, specifically allocated for this purpose, by means of emergency rehabilitation loans.

To make standard rural rehabilitation loans, as soon as practicable, pursuant to $$ 303.21–303.30 to emergency rural rehabilitation clients who receive emergency loans pursuant to this subpart, provided such clients are in need of, and are eligible for, standard rural rehabilitation loans.

Not to make an emergency rehabilitation loan to any person eligible for a standard rural rehabilitation loan to whom such standard rural rehabilitation loan can be made in time to care for his emergency needs.

Not to make an emergency rehabilitation loan to any person who can secure financing from any other lending agency adequate to care for his emergency needs, upon reasonable terms.*+ [Par. 2]

*The source of $8 303.46 to 303.55, inclusive, (except for the amendments noted in the text,) is Administration order 166, rev. 1, July 18, 1936.

303.47 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 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 classified as emergency rural rehabilitation loan cases, emergency corporation loan cases and grant cases, 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 specifically allotted funds permit, if they evidence an acceptable initiative and resourcefulness, managerial capacity, and promise of ability to repay loans made to them; (b) if the land available to them is suitable for cultivation; (c) if there is a reasonable probability of continued successful farming operations; (d) if in areas designated as submarginal, the applicant agrees to cooperate in carrying forward such long time remedial program as may be evolved by the residents of such areas in cooperation with agencies of the State and Federal Government concerned with formulating such remedial program; (e) if the applicant agrees to use farming methods approved by the agricultural college of his state, to plant a garden for home use, and to plant sufficient acreage of feed crops to supply feed for all his work stock and subsistence livestock unless seasonal conditions make such action impracticable (Nothing herein contained shall be construed to prevent the making of a loan for the purchase of feed for work stock and subsistence livestock in any county designated as drought area by the United States Department of Agriculture.); and (f) no such loans will be made: To any applicant who can obtain credit from other sources, including Production Credit Associations, in amount reasonably adequate to meet his emergency needs; either to any member of

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*For statutory citation, see note to $ 303.21.

the immediate family of or to any person living or farming with a farmer who has obtained a loan hereunder or whose application for a loan hereunder has been disapproved; to corporations, minors, agents, executors or administrators, or to receivers or trustees; to a wife living with her husband, unless the husband joins in the application, note, and mortgage or lien; to any applicant in an amount greater than his immediate cash needs, all loans to be made in multiples of five dollars ($5); to any applicant whose major income is derived from any source other than farming; for the purchase of farm machinery and equipment or livestock, for the payment of taxes, land debts, or interest ; or for any purpose other than those specified herein. (Loans for any purpose other than those specified in this subpart will be made under the provisions of $$ 303.21–303.30 which include the preparation of acceptable Farm and Home Management Plans.*1 [Par. 3a]

303.48 Purposes for which loans may be made. Loans may be made for the maintenance of livestock in any county of a state in which one or more counties have been designated as drought area by the United States Department of Agriculture.

(a) Loans may be made for the purchase of feed for the maintenance of work stock and subsistence livestock and for the payment of transportation costs in moving such work stock and livestock to sources of feed and for their return to the borrower's farm.

(b) Loans may be made for the purchase of feed for the maintenance of foundation herds of range and dairy cattle and foundation flocks of sheep, whether they be purebred or high grade, and for the payment of transportation costs in moving such herds and flocks to sources of feed and for their return to the borrower's farm. The Administrator will prescribe a limit on the amount of loan that may be made for this purpose to any one borrower in a given region or state. He will likewise prescribe a limit on the average of all loans for this purpose by regions or states.

(c) Since funds available or likely to be available for meeting the livestock problem in the drought area are inadequate for all needs, preference shall be given to maintaining the work stock, milk cows, poultry, hogs and sheep actually required for farm work and for consumption on the farm. The number of units of such subsistence livestock should be held to the minimum consistent with efficient operation of the farm and economical maintenance of the family. (One horse, one cow, two head of young stock, five hogs or 2,100 pounds of pork, seven sheep or 100 chickens, shall for the purpose of this subpart, constitute one animal unit.) The regional director may, consistent with the policy herein stated, limit the number of subsistence animal units for which a feed loan may be made to an individual in a given State. If, however, the prices of feed become so high that such subsistence animals can be replaced at the conclusion of the drought more advantageously than they can be maintained, then loans by the Farm Security Administration for purchasing feed

"For statutory citation, see note to 8 303.21.

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for such livestock shall be discontinued. In this connection, consideration shall be given to the borrower's equity in his work stock and livestock rather than to its present market value. Maintaining dairy cows for the production of products for sale does not come within the category of maintaining subsistence livestock as herein defined.

(d) Loans may be made for summer fallowing; for the production of crops; for planting, cultivating, and harvesting of crops; for supplies incidental to, and necessary for, such production, planting, cultivating, and harvesting; for feed for livestock; and for the production of feed for livestock. Loans will be limited to the amount necessary to meet the immediate and actual cash needs.* [Par. 3b, A.O. 166 (rev. 1), July 18, 1936, as amended by Supp. 1, Aug. 25, 1936]

303.49 Rate of interest. Interest will be charged at the rate of 5 percent per annum on all emergency rehabilitation loans made under the provisions of this subpart.** [Par. 3c]

303.50 Amortization. Loans will be made for the shortest period consistent with the purpose of this subpart, considering the financial condition and probable future income of the borrower and the purpose for which the loan is made. No loan may be made under this subpart for a period longer than 18 months.*+ (Par. 3d]

303.51 Notes and security. All loans made under the provisions of this subpart will be evidenced by a promissory note payable to the Administrator of the Farm Security Administration in the full amount of the approved Loan Agreement. The full amount of the Loan Agreement will, in the case of small loans for immediate use, be entered upon a single voucher which will be certified for payment to the client in one check. Large loans may be certified for payment in separate instalments as needed by the client or they may be certified for payment to the client in a single check. When large loans are paid by a single check in advance of the date actually needed by .the client, the rural rehabilitation supervisor may, when deemed necessary to provide assurance that the funds will be used for the purposes set forth in the Loan Agreement, require that the unused portion of the loan be deposited in a bank to the credit of the borrower subject to withdrawal when countersigned by the rural rehabilitation supervisor. Banks in which such funds are deposited shall have their deposits insured by the Federal Deposit Insurance Corporation.

Loans made for purposes set forth in § 303.48 (a) and (b) (feed loans in counties designated as drought areas) will be secured in the full amount of the loan by the best lien obtainable upon the work stock and livestock maintained through the proceeds of the loan and upon any other personal property which the borrower may own. However, this provision shall not operate to prevent making loans in the amounts of four hundred dollars ($400) or less when, in the judgment of the county rural rehabilitation supervisor, such loans are otherwise warranted and necessary for the alleviation of distress.

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*For statutory citation, see note to $ 303.21.

Loans to finance the production, planting, cultivation, or harvesting of a crop or part thereof (loans pursuant to 8 303.48 (d)) will be secured in the full amount of the loan by a first lien or an agreement to give a first lien upon such crop or such part thereof, Provided, however, that if the landlord of the applicant for such a loan has by local law or by the terms of his lease a first lien on such crop, and if a waiver and subordination of such lien is not obtainable, a lien subordinate to that of the landlord may be taken.

NOTE: In order to preserve the statutory priority of liens for seed loans made in South Dakota, Minnesota, and Montana, each applicant in these states who applies for a loan for the purchase of seed only will execute a note for the amount of such loan and secure the repayment of such loan by a seed lien. Each applicant in the above states who applies for a loan to be used in part for seed and in part for other purposes will execute a note for the total amount of such loan and secure the repayment of such loan by a crop mortgage, and, in addition thereto, will execute a seed lien to secure the repayment of that part of such loan which is proposed to be used for the purchase of seed.

Loans to finance in whole or in part the purchase of feed for livestock or to finance in whole or in part the production of feed for livestock (pursuant to $ 303.48 (d)) will be secured in the full amount of the loan by a first lien on the livestock to be fed, Provided, however, That when such livestock is already subject to a first lien and a waiver and subordination agreement is not obtainable, a second lien may be taken upon such livestock.

No loans made pursuant to § 303.48 (d) (crop loan) will be made however if the security to be taken in connection therewith is not sufficient to secure adequately the repayment to the Farm Security Administration of such loans.*+ [Par. 3e]

CROSS REFERENCE: For Federal Deposit Insurance Corporation, see 12 CFR Chapter III.

303.52 Recording and filing of securing documents. This procedure will be that which is outlined in $ 303.27.* (Par. 5, A.O. 41, rev. 1, Dec. 21, 1935]

303.53 Limitations upon loans for crop production, pursuant to 8 303.48 (d). No such loan will be made for more than the immediate and actual cash needs of the client, which in the particular case, must not exceed actual costs per acre as determined by individual consideration of the various factors involved, for example, whether it is necessary to purchase seed, feed, fertilizer, spraying material, and/or fuel for tractors; the cost thereof; any other incidental expenses currently incurred in that community in connection with the

*For statutory citation, see note to $ 303.21.

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particular crop to be produced. No loan made for crop production purposes may exceed the following maximum allowances per acre:

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(a) These figures include allowances for fuel, oil, and feed for work stock for crop production purposes and incidental expenses, for which no additional allowances will be made.

(b) Where spray material, including dust is used without commercial fertilizer, the allowance for such spray material and dust will be the difference, if any, between the allowances in column (2) and column (3).

(c) Of the grain allowances shown in the table not more than one dollar ($1.00) will be used for summer fallowing.

(d) Allowances for commercial fertilizer will be allowed only in areas where commercial fertilizer is customarily used. ** [Par. 5]

303.54 Administrative authorization. Regional directors are authorized to make loans as provided in this subpart, and to execute legal instruments and perform functions given in § 303.29 (b) (1), (2), (3), (4), and (7) in connection with making and discharging such loans on behalf of the Farm Security Administration. (A regional director in executing such legal instruments will sign the name

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*For statutory citation, see note to $ 303.21.

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