RD 1940-16 Promisory Note

Form RD 1940-16
(Rev. 7-05)

Form Approved
OMB No. 0575-0172

UNITED STATES DEPARTMENT OF AGRICULTURE
RURAL HOUSING SERVICE

PROMISSORY NOTE
SATISFIED

Type of Loan

This
day of
,20
United States of America
By:
Title:
USDA, Rural Housing Services

Loan No.

Date:

20
(Property Address)

,
(City or Town)

,
(County)

(State)

BORROWER'S PROMISE TO PAY. In return for a loan that I have received, I promise to pay to the order of the United
States of America, acting through the Rural Housing Service (and its successors) (''Government'') $
(this amount is called ''principal''), plus interest.
INTEREST. Interest will be charged on the unpaid principal until the full amount of the principal has been paid. I will pay
interest at a yearly rate of
%. The interest rate required by this section is the rate I will pay both before
and after any default described below.
PAYMENTS. I agree to pay principal and interest using one of two alternatives indicated below:
I. Principal and interest payments shall be temporarily deferred. The interest accrued to
,
shall be added to the principal. The new principal and later accrued interest shall be payable in
regular amortized
installments on the date indicated in the box below. I authorize the Government to enter the amount of such new principal
here: $
, and the amount of such regular installments in the box below when such amounts have been
determined. I agree to pay principal and interest in installments as indicated in the box below.
II. Payments shall not be deferred. I agree to pay principal and interest in
the box below.

installments as indicated in

I will pay principal and interest by making a payment every month.
I will make my monthly payment on the
day of each month beginning on
and
,
continuing for
months. I will make these payments every month until I have paid all of the principal and interest
and any other charges described below that I may owe under this note. My monthly payments will be applied to interest
before principal. If on
, I still owe amounts under this note, I will pay those amounts in full on
,
that date, which is called the ''maturity date.''
. I will make my monthly payment at the post office address
My monthly payment will be $
or a different place if required by the Government.
noted on my billing statement
PRINCIPAL ADVANCES. If the entire principal amount of the loan is not advanced at the time of loan closing, the
unadvanced balance of the loan will be advanced at my request provided the Government agrees to the advance. The
Government must make the advance provided the advance is requested for an authorized purpose. Interest shall
accrue on the amount of each advance beginning on the date of the advance as shown in the Record of Advances
below. I authorize the Government to enter the amount and date of the advance as shown in the Record of Advances
below. I authorize the Government to enter the amount and date of such advance on the Record of Advances.
HOUSING ACT OF 1949. This promissory note is made pursuant to title V of the Housing Act of 1949. It is for the type
of loan indicated in the ''Type of Loan'' block at the top of this note. This note shall be subject to the present regulations
of the Government and to its future regulations not inconsistent with the express provisions of this note.
According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid OMB control
number. The valid OMB control number for this information collection is 0575-0172. The time required to complete this information collection is estimated to
average 15 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information.

1

LATE CHARGES. If the Government has not received the full amount of any monthly payment by the end of
days
after the date it is due, I will pay a late charge. The amount of the charge will be
percent of my overdue
payment of principal and interest. I will pay this charge promptly, but only once for each late payment.
BORROWER'S RIGHT TO PREPAY. I have the right to make payments of principal at any time before they are due.
A payment of principal only is known as a ''prepayment.'' When I make a prepayment, I will tell the Government in
writing that I am making a prepayment.
I may make a full prepayment or partial prepayment without paying any prepayment charge. The Government will use
all of my prepayments to reduce the amount of principal that I owe under this Note. If I make a partial prepayment, there
will be no changes in the due date or in the amount of my monthly payment unless the Government agrees in writing to
those changes. Prepayments will be applied to my loan in accordance with the Government's regulations and
accounting procedures in effect on the date of receipt of the payment.
ASSIGNMENT OF NOTE. I understand and agree that the Government may at any time assign this note without my
consent. If the Government assigns the note I will make my payments to the assignee of the note and in such case
the term ''Government'' will mean the assignee.
CREDIT ELSEWHERE CERTIFICATION. I certify to the Government that I am unable to obtain sufficient credit
from other sources at reasonable rates and terms for the purposes for which the Government is giving me this loan.
USE CERTIFICATION. I certify to the Government that the funds I am borrowing from the Government will only be
used for purposes authorized by the Government.
LEASE OR SALE OF PROPERTY. If the property constructed, improved, purchased, or refinanced with this loan is (1)
leased or rented with an option to purchase, (2) leased or rented without option to purchase for 3 years or longer, or (3)
is sold or title is otherwise conveyed, voluntarily or involuntarily, the Government may at its option declare the entire
remaining unpaid balance of the loan immediately due and payable. If this happens, I will have to immediately pay off
the entire loan.
REQUIREMENT TO REFINANCE WITH PRIVATE CREDIT. I agree to periodically provide the Government with
information the Government requests about my financial situation. If the Government determines that I can get a loan
from a responsible cooperative or private credit source, such as a bank or a credit union, at reasonable rates and terms
for similar purposes as this loan, at the Government's request, I will apply for and accept a loan in a sufficient amount to
pay this note in full. This requirement does not apply to any cosigner who signed this note pursuant to section 502 of the
Housing Act of 1949 to compensate for my lack of repayment ability.
SUBSIDY REPAYMENT AGREEMENT. I agree to the repayment (recapture) of subsidy granted in the form of
payment assistance under the Government's regulations.
CREDIT SALE TO NONPROGRAM BORROWER. The provisions of the paragraphs entitled ''Credit Elsewhere
Certification'' and ''Requirement to Refinance with Private Credit'' do not apply if this loan is classified as a
nonprogram loan pursuant to section 502 of the Housing Act of 1949.
DEFAULT. If I do not pay the full amount of each monthly payment on the date it is due, I will be in default. If I am in
default the Government may send me a written notice telling me that if I do not pay the overdue amount by a certain date,
the Government may require me to immediately pay the full amount of the unpaid principal, all the interest that I owe, and
any late charges. Interest will continue to accrue on past due principal and interest. Even if, at a time when I am in
default, the Government does not require me to pay immediately as described in the preceding sentence, the Government
will still have the right to do so if I am in default at a later date. If the Government has required me to immediately pay in
full as described above, the Government will have the right to be paid back by me for all of its costs and expenses in
enforcing this promissory note to the extent not prohibited by applicable law. Those expenses include, for example,
reasonable attorney's fees.

2

NOTICES. Unless applicable law requires a different method, any notice that must be given to me under this note will be
given by delivering it or by mailing it by first class mail to me at the property address listed above or at a different address if
I give the Government a notice of my different address. Any notice that must be given to the Government will be given by
mailing it by first class mail to the Government at USDA Rural Housing Service, c/o Customer Service Branch
, or at a different address if I am given a notice of that
Post Office Box 66889, St. Louis, MO 63166
different address.

OBLIGATIONS OF PERSONS UNDER THIS NOTE. If more than one person signs this note, each person is fully and
personally obligated to keep all of the promises made in this note, including the promise to pay the full amount owed.
Any person who is a guarantor, surety, or endorser of this note is also obligated to do these things. The Government
may enforce its rights under this note against each person individually or against all of us together. This means that any
one of us may be required to pay all of the amounts owed under this note. The term ''Borrower'' shall refer to each
person signing this note.
WAIVERS. I and any other person who has obligations under this note waive the rights of presentment and notice of
dishonor. ''Presentment'' means the right to require the Government to demand payment of amounts due. ''Notice of
dishonor'' means the right to require the Government to give notice to other persons that amounts due have not been paid.
WARNING: Failure to fully disclose accurate and truthful financial information in connection with my loan
application may result in the termination of program assistance currently being received, and the denial of
future federal assistance under the Department of Agriculture's Debarment regulations, 7 C.F.R. part 3017.

Seal

Seal

Borrower

Borrower
Seal

Seal

Borrower

Borrower

RECORD OF ADVANCES
AMOUNT
(1) $
(2) $
(3) $
(4) $
(5) $
(6) $
(7) $

DATE

AMOUNT
(8) $
(9) $
(10 )$
(11) $
(12) $
(13) $
(14) $

DATE

AMOUNT
(15) $
(16) $
(17) $
(18) $
(19) $
(20) $
(21) $
TOTAL

3

$

DATE