Form 3555-17 Loan Note Guarantee

Form RD 3555-17
(Rev. 8-22)

UNITED STATES DEPARTMENT OF AGRICULTURE
RURAL DEVELOPMENT
RURAL HOUSING SERVICE

Form Approved
OMB No. 0575-0179
Exp. Date: XX/XX/XXXX

LOAN NOTE GUARANTEE
County

State

Date of Note (Settlement Date)

Primary Borrower Name

RHS Primary Borrower ID

Co-Borrower Name

RHS Co-Borrower ID

Co-Borrower Name

RHS Co-Borrower ID

Co-Borrower Name

RHS Co-Borrower ID

Co-Borrower Name

RHS Co-Borrower ID

Lender

Lender IRS ID No.

Lender's Address

Principal Amount of Loan

This Loan Note Guarantee is issued under Lender Agreement for Guaranteed Single Family Housing Loans dated
in connection with the above identified loan.
In consideration of the making of the subject loan by the Lender, the United States of America, acting through the Rural Housing Service of
the Rural Development mission area (herein called ''RHS''), pursuant to Title V of the Housing Act of 1949 (42 U.S.C. 1471 et. sec.), agrees that,
subject to the terms and conditions herein, it will pay to the Lender the lesser of
1. Any loss of an amount equal to 90 percent of the principal amount actually advanced to the Borrower, or
2. Any loss sustained by the lender of an amount up to 35 percent of the principal amount actually advanced to the Borrower, plus
85 percent of any additional loss sustained by the Lender of an amount up to the remaining 65 percent the principal amount
actually advanced to the Borrower.
Loss includes only (a) principal and interest evidenced by the Note; (b) any loan subsidy due and owing; and (c) any principal and
interest indebtedness on RHS approved protective advances for protection and preservation of collateral. Additional interest (including any
subsidy) shall be covered by the Loan Note Guarantee up to a limit prescribed by RHS and in effect at the time any loss under this Loan Note
Guarantee is paid. Net proceeds received from liquidation of the collateral will be used in calculating the amount of loss sustained by the Lender. If
the Lender acquires the collateral, the net proceeds from collateral for calculating loss shall be determined by RHS as
follows: (i) the collateral will be appraised as of the date of acquisition by the Lender then (ii) deduct from such appraised value
an estimate of liquidation cost which will include an allowance for 60 days, the estimated time the property will be held by the Lender.
If RHS conducts the liquidation of the loan, loss occasioned to a Lender by accruing interest after the date RHS accepts responsibility for
the liquidation will not be covered by the Loan Note Guarantee.
Lender may sell the guaranteed loan only to a Lender that meets the RHS qualifications and, in the manner provided in 7 CFR part 3555.
Lender may obtain participation in its loan under its procedures. Participation means a sale of an interest in the loan wherein the Lender retains
the note, collateral securing the note, and all responsibility for all loan servicing and liquidation. A participant has no rights under this instrument.

CONDITIONS OF THE GUARANTEE
1.

Loan Servicing
Lender will be responsible for servicing the entire loan and Lender will remain mortgagee and/or secured party of record. The Lender may sell loan
servicing rights to an RHS eligible Lender when the purchasing Lender agrees to be bound by all of the same terms as the selling Lender
and this agreement and the RHS Lender Agreement for Guaranteed Single Family Housing Loans.
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person person be subject to a penalty for failure to comply with a collection of information subject to the
requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB Control Number. The OMB Control Number for this information collection is 0575-0179. Public
reporting for this collection of information is estimated to be approximately 5 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data
needed, completing and reviewing the collection of information. All responses to this collection of information are voluntary. However, in order to obtain or retain a benefit, the information in this form is required.
Rural Development has no plans to publish information collected under the provision of this program. Send comments regarding this burden estimate or any other aspect of this collection of information, including
suggestions for reducing burden to: Information Collection Clearance Officer, Rural Development Innovation Center, Regulations Management Division at ICRMTRequests@usda.gov.

Form RD 3555-17
(Rev. 08-22)
2.

Full Faith and Credit
The Loan Note Guarantee constitutes an obligation supported by full faith and credit of the United States and is incontestable except for
fraud or misrepresentation of which the lender has actual knowledge at the time it becomes such lender or which the lender participates in
or condones. A note which provides for the payment of interest on interest shall not be guaranteed. If the note to which this instrument is attached or
relates provides for the payment of interest on interest, then this Loan Note Guarantee is void. In addition, the Loan Note Guarantee will be
unenforceable by the lender to the extent any loss is occasioned by violation of usury laws, negligent servicing, or failure to obtain the required
security regardless of the time at which RHS acquires knowledge of the forgoing. Any losses occasioned will be unenforceable by the lender to the
extent that loan funds are used for purposes other than those approved by RHS in its Form RD 3555-18, ''Conditional Commitment for Single Family
Housing Loan Guarantee.'' Negligent servicing is defined as the failure to perform those services which a reasonably prudent lender would perform
in servicing its own loan portfolio of loans that are not guaranteed. The term includes not only the concept of a failure to act but also not acting in a
timely manner or acting contrary to the manner in which a reasonably prudent lender would act up to the time of loan maturity or until a final loss is
paid. If RHS determines that a Lender did not originate a loan is accordance within the requirements in 7 CFR part 3555, and RHS pays a claim
under the loan guarantee, RHS may revoke the Lenders' eligibility status in accordance with Section 3555.52 and may also require the Lender:
1. To indemnify RHS for the loss, if the payment under the guarantee was made within 60 months of loan closing; or
2. To indemnify RHS for the loss regardless of how long ago the loan closed, if RHS determines that fraud or misrepresentation was involved in
connection with the origination of the loan in accordance with Section 3555.108.
3. Lender will receive all payments of principal and interest, annual fee, and any loan subsidy on the account of the entire loan.
4. The Loan Note Guarantee is subject to an annual fee billed to the Lender and collected by the Agency on an annual basis for the life of the loan,
based upon an annual fee percentage of: _____________%. The annual fee will be based on the average annual scheduled unpaid principal balance
of the loan and may be passed on to the guaranteed loan borrower. A late charge will be charged if the fee is not paid by the date set by RHS.
5.Protective Advances made by the Lender pursuant to RHS regulations will be guaranteed against a percentage of the loss to the same extent as
provided in the Loan Note Guarantee.
6. The Loan Note Guarantee will terminate automatically (a) upon full payment of the guaranteed loan; or (b) upon full payment of any loss obligation
hereunder; or (c) upon written notice from the Lender to RHS that the guarantee will terminate provided this Loan Note Guarantee is returned to be
canceled by RHS.
7. Any amount due under this instrument will be determined and paid, as provided in 7 CFR part 3555 in effect on the date of this instrument.
8. All notices and actions may be initiated through Rural Development National Financial and Accounting Operations Center at the following email
address: rd.so.hsb@usda.gov
UNITED STATES OF AMERICA
RURAL DEVELOPMENT
RURAL HOUSING SERVICE
By:
Title:
Date:

Assumption Agreement by:

Dated:
(Transferee)

Assumption Approved by RHS:
(new note, if taken, is attached)

Dated:

Assumption Agreement by:

Dated:
(Transferee)

Assumption Approved by RHS:
(new note, if taken, is attached)

Dated: