Submission of Information Collection to OMB (Under Paperwork Reduction Act and 5 CFR Part 1320)

SUMMARY: The information collection requirement described below has

been submitted to OMB for expedited clearance under 5 CFR 1320.18. The

Agency solicits comments on subject submission. This action is

necessary in order for the Agency to amend its Farmer Programs

servicing regulations to add the Disaster Set-aside (DSA) Program. This

program will be made available to Farmer Program borrowers who operated

a farm or ranch in a county where a disaster occurred in 1993 and was

declared/designated a disaster area in accordance with FmHA

regulations. Under this program, distressed borrowers will have the

opportunity to move their next scheduled FmHA annual installment to the

end of the loan term. The intended effect is to service disaster

victims in an efficient and timely manner while keeping them in

business.

ADDRESSES: Interested persons are invited to submit comments regarding

this submission. Comments should refer to the proposal by name and

should be sent to: Lisa Grove, USDA Desk Officer, Office of Management

and Budget, New Executive Office Building, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Kimberly R. Laris, Loan Officer,

Farmer Programs Loan Servicing and Property Management Division, USDA,

14th Street and Independence Avenue, SW., South Building, Washington,

DC 20250, Telephone (202) 720-4572.

SUPPLEMENTARY INFORMATION: The Agency has submitted the proposal for

collection of information as described below, to OMB for clearance as

required by the Paperwork Reduction Act (44 U.S.C. Chapter 35). It is

requested that OMB approve this submission within 10 days. The

supporting statement attached explains the need for adding FmHA

Regulation 1951-T, Disaster Set-Aside Program.

Authority: Section 3507 of the Paperwork Reduction Act, 44

U.S.C. 3507.

Supporting Statement

7 CFR 1951-T, Disaster Set-Aside Program

1. Explanation of the circumstances that make the collection of

information necessary.

The Farmers Home Administration (FmHA) is requesting expedited

clearance of the paperwork burden for this regulation. Approval is

requested in accordance with the Paperwork Reduction Act and 5 CFR

1320.

Eighty percent of the 3,151 counties serviced by FmHA were declared

disaster areas in 1993. Due to heavy flooding in the midwest and

extreme droughts in the South, considerably more borrowers were

affected by disasters in 1993 than in any of the previous five years.

Although this program was initially begun for the borrowers who were

affected by the 1993 disasters, it will also help those who are

affected by the 1994 flood disaster in the South if they were also

affected by the previous disasters in 1993. It will also be possible to

consider extension of this program to assist borrowers affected only by

the 1994 disaster. This consideration will be given prior to issuance

of the final rule. In order to prevent massive delinquencies and farm

failures, it is imperative that borrowers in a crisis situation receive

immediate financial assistance.

It is for this purpose and by the authority granted the Secretary

under the Consolidated Farm and Rural Development Act (CONACT), Section

331A (7 U.S.C. 1981a), FmHA has made available the Disaster Set-aside

Program. As provided in Section 331A, the Secretary has the authority

to defer principal and interest at the request of the borrower on any

outstanding loan made, insured, or held by the Secretary under the

CONACT, subject to the borrower showing that due to circumstances

beyond his/her control, he/she is temporarily unable to continue making

payments when due without unduly impairing his/her standard of living.

The set-aside program is designed to assist borrowers in financial

distress who operated a farm or ranch in a county where a disaster

occurred in 1993 and was declared/designated a disaster area as set

forth in subpart A of part 1945 of this chapter.

Under this program, farmer programs borrowers can receive immediate

financial relief from their FmHA payment obligations. FmHA projects

that approximately 60,000 borrowers affected by 1993 disasters will

request assistance under the set-aside program. Of these borrowers,

approximately 20,000 have installments that came due January 1, 1994.

If these installments are not paid by January 1, 1995, or otherwise

set-aside, the borrower will be two installments behind and will no

longer be eligible to receive disaster set-aside assistance. Borrowers

more than one payment behind will be able to receive more assistance

and offered more options through FmHA's loan servicing program under 7

CFR 1951-S. However, borrowers who cannot obtain servicing through 7

CFR 1951-S may be able to cure their delinquency with set-aside

assistance. The set-aside program will be better for some borrowers

than the servicing program provided through 7 CFR 1951-S since the set-

aside will be a faster process, eligibility requirements are easier to

meet, paperwork is less, and some borrowers will be able to be back on

track after one payment is set-aside. The Agency realizes that although

this may not be a solution to finding the borrower a feasible plan, it

may provide temporary assistance to borrowers needing that type of

relief. It will allow some borrowers to use sources other than FmHA to

maintain their farm operation and allow them to work out their

financial difficulty over the next year or so. Borrowers can cure their

FmHA delinquency while at the same time continue farming and find the

means to recover from the affects of the disaster. Other borrowers may

prefer to use the year to voluntarily liquidate. This regulation will

therefore provide options to prevent the foreclosure of borrowers in

both of these instances. It is because of these reasons that

implementation of this regulation as an interim rule is crucial to

providing assistance to borrowers with the most urgent need while

keeping them in business or allowing them crucial time to make optional

choices. Borrowers who are not eligible for the DSA program, or who

need more extensive servicing, will still have the opportunity to be

considered for FmHA's primary loan servicing program as set forth in 7

CFR 1951-S.

The set-aside program allows eligible borrowers to move one FmHA

annual installment for each loan to the end of the loan term, thereby

quickly eliminating the immediate financial stress. The installment

set-aside may be the one due immediately after the disaster or, if that

installment is paid to the neglect of other creditors or family living

and operating expenses, then the next scheduled installment may be set-

aside. Borrowers who received primary loan servicing after the disaster

will not be eligible for the disaster set-aside, as restructuring of

the account resolved the financial distress for the current and next

production/marketing period.

The reporting requirements imposed on the public by the regulations

set out in 7 CFR 1951-T are necessary to administer this program.

Borrowers must request DSA in writing and be able to show from their

actual production income and expense records that because of the

disaster, their projected income was reduced to an amount that would

prevent payment of all family living and operating expenses, and paying

amounts due FmHA and/or other creditors. The addendum is needed in

order to amend the promissory note/assumption agreement to reflect the

amount set-aside and provide for collection on or before the final due

date of the loan.

2. Indicate how, by whom, and for what purpose the information is

to be used and the consequence to Federal program or policy activities

if the collection of information was not conducted.

The information required of FmHA farm borrowers is collected by

FmHA loan servicing officials to facilitate an effective decision-

making process when considering set-aside requests.

The effectiveness of this regulation is dependent upon collection

of information from the borrower and the ability to execute an

agreement for future repayment of the set-aside installment. Without

this information, the Agency cannot provide disaster victims with the

servicing they most desperately need in an expedient manner.

Specifically, the burden imposed by this regulation is described as

follows:

Written Request for DSA

The letter of notification about the DSA program requires borrowers

to respond in writing if they wish to be considered for set-aside.

Written response can be limited to one sentence with signatures of all

persons liable for the FmHA debt. The burden is limited to the time it

takes the borrower to read the notification letter and prepare a signed

written request. The average response time is estimated to be 15

minutes.

Production, Income and Expenses Records

The letter of notification about the DSA program also requires the

borrower to provide actual production, income and expense figures for

the production/marketing period in which the 1993 disaster occurred,

unless this information has already been provided to FmHA. The majority

of the borrowers who request DSA will have already provided these

records because of other FmHA regulations that require annual year-end

analysis of the farming operation. The average response time is

estimated to be 5 minutes.

Addendum to the Promissory Note/Assumption Agreement for the Disaster

Set-Aside Program

In order for eligible borrowers to participate in the DSA program,

an addendum must be signed for each loan installment set-aside and

attached to the promissory note/assumption agreement. This addendum

must be signed within 30 days from the date the borrower is notified of

eligibility. The addendum provides an agreement from the borrower that

the installment being set-aside, plus accrued interest on any principal

set-aside, will be paid on or before the final due date of the loan.

The addendum is completed by FmHA personnel. The burden imposed on the

borrower is limited to the time required to read and sign the addendum.

The average burden time is estimated to be 5 minutes.

3. Describe any consideration of the use of improved information

technology to reduce burden and any technical or legal obstacles to

reducing burden.

The information collected is of such type and nature that the use

of improved information technology, such as data and word processing,

would not significantly reduce the public burden. The Agency has not

identified any legal obstacles to reducing reporting burdens associated

with this regulation.

4. Describe efforts to identify duplication.

Every effort has been made to avoid unnecessary duplication of

information collected. Any information that was previously collected

concerning the debtor that remains relevant is utilized to reduce the

public burden.

5. Show specifically why any similar information already available

cannot be used or modified for the purpose(s) described in 2.

There is no similar information available to replace the written

request of the borrower or the set-aside addendum. However, and as

previously stated, if the borrowers production and income and expense

records for the disaster year have already been collected, this

information does not have to be provided again.

6. If the collection of information involves small businesses or

other small entities, describe the methods used to minimize burden.

The information required by this regulation places no burden on

small businesses or other small entities beyond that performed in the

course of normal business practices.

7. Describe the consequence to Federal program or policy activities

if the collection were conducted less frequently.

The borrower can only request disaster set-aside one time.

Therefore, the frequency of collection is at the absolute minimum level

necessary to enable FmHA to make responsible decisions.

8. Explain any special circumstances that require the collection to

be conducted in a manner inconsistent with the guidelines in 5 CFR

1320.6.

There are no information requirements that are inconsistent with

the guidelines in 5 CFR 1320.6.

9. Describe efforts to consult with persons outside the agency to

obtain their views on the availability of data, frequency of

collection, the clarity of instructions and recordkeeping, disclosure,

or reporting format (if any), and on the data elements to be recorded,

disclosed, or reported.

The following groups were contacted in July 1994 to obtain their

views on the paperwork burden: (1) Lane Landenburger of the North

Dakota Department of Agriculture, Telephone number 701-223-4423, (2)

Lynn Hayes, Farmers Legal Action Group, Telephone number 612-223-5400,

(3) Renee Robinson, Illinois Stewardship Alliance, Telephone number

217-498-9707, and (4) Melody G. Julian, National Association of County

Supervisors, 316-227-3761. The regulation and form letter were

reviewed. Their comments were all favorable. In their opinion, the

regulation and instructions to the borrower were easy to understand.

Most borrowers should have their actual records for the 1993 disaster

year completed since the 1993 tax year has already passed. In fact,

most borrowers will have already provided these records to FmHA for

their year-end analysis and will not have to provide them again. In

these cases, the only item left to submit is the letter of request.

They also stated the addendum the borrower signs is easy to read and

understand and there shouldn't be any confusion.

10. Describe any assurance of confidentiality provided to

respondents and the basis for the assurance in statute, regulation, or

agency policy.

There is no assurance of confidentiality provided to respondents

for the information required by this regulation.

11. Provide additional justification for any questions of a

sensitive nature, such as sexual behavior and attitudes, religious

beliefs, and other matters that are commonly considered private.

The information to be collected under this regulation does not

involve any questions of a sensitive nature.

12. Provide estimates of annualized cost to the Federal Government

and to the respondents. Also provide a description of the method used

to estimate cost, which should include quantification of hours,

operational expenses, and any other expense that would not have been

incurred without the paperwork burden.

The annual cost to the Federal Government to implement and

administer this regulation is estimated to be $1,544,400, which

includes salaries, operational expenses and overhead. The national

average cost factor is $17.16 per hour. Federal Government costs for

this regulation are based on the number of notifications, responses and

persons qualifying for the program, times the hourly cost factor.

The estimated annual cost to respondents is $246,092, using a rate

of $10.34, derived from the Statistical Abstract of the United States

1992, the National Data Book, Table 650, page 410. This table was based

on information from the U.S. Bureau of Labor Statistics Average Hourly

and Weekly Earnings in Current and Constant (1982) Dollars for 1991.

13. Provide estimates of the burden of the collection of

information.

Attached is a chart indicating the estimates of the public's annual

burden. FmHA estimates that approximately 100,000 farmer programs

borrowers will be notified of the DSA program. This number includes all

FP borrowers who operated in a disaster area during 1993. FmHA

estimates that approximately 60,000 of these borrowers will make a

written request for DSA. The other 40,000 will not apply for various

reasons. Approximately 10,000 borrowers have or will be restructured

under subpart S of part 1951 and therefore will not be eligible for

this program. Approximately 20,000 will not apply because they know

they cannot meet the eligibilty requirements. The other 10,000 will not

apply because even though they might have operated in a disaster area,

they were able to pay all family living and operating expenses, and all

payments to FmHA and other creditors.

Of the 60,000 borrowers who request DSA, FmHA estimates that 50,000

will actually receive DSA. The other 10,000 will either not qualify for

the program or will choose 1951-S servicing instead.

14. Explain reasons for changes in burden, including the need for

any increase.

This is a new regulation.

15. For collections of information whose results are planned to be

published for statistical use.

There are no plans to publish information from these documents for

statistical purposes and therefore Section B does not apply.

7 CFR 1951-T, Disaster Set-Aside Program

--------------------------------------------------------------------------------------------------------------------------------------------------------

July 8, 1994

----------------------------------------------------------------------------

Est. No. Est.

Section of regulation Title Form No. Est. No. Reports Total of hours Est. hourly Est.

of filed annual per total salary total

responses annually responses response hours rate cost

--------------------------------------------------------------------------------------------------------------------------------------------------------

1951.953(b)(1)................. Written Request for DSA....... Letter.... 60,000 1 60,000 .25 15,000 10.34 $155,100

1951.953(b)(2)................. Production, income and expense Written... 60,000 1 60,000 .08 4,800 10.34 49,632

records.

1951.957(a)(1) Exhibit A....... Addendum to the Promissory Written... 50,000 1 50,000 0.8 4,000 10.34 41,360

Note/Assumption Agreement for

the Disaster Set-aside

Program.

----------------------------------------------------------------------------

Totals................... .............................. .......... ......... 170,000 ......... 23,800 246,092 ......... .........

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PART 1951--SERVICING AND COLLECTIONS

Subpart T--Disaster Set-aside Program

Sec.

1951.951 Purpose.

1951.952 General.

1951.953 Notification and request for DSA.

1951.954-1951.956 [Reserved]

1951.957 Eligibility determination and processing.

1951.958 Supervision and servicing of borrowers with DSA.

1951.959 Exception authority.

1951.960-1951.999 [Reserved]

1951.1000 OMB control number.

Exhibit A--Addendum to the Promissory Note/Assumption Agreement for

the Disaster Set-Aside Program

Subpart T--Disaster Set-aside Program

Sec. 1951.951 Purpose.

This subpart sets forth the policies and procedures for

establishing and implementing the Disaster Set-aside Program (DSA). The

DSA program is available to Farmer Programs (FP) borrowers, as defined

in subpart S of this part, who suffered losses as a result of a 1993

disaster. FP loans that may be serviced under this subpart include Farm

Ownership (FO), Operating (OL), Soil and Water (SW), Emergency (EM),

Economic Emergency (EE), Special Livestock (SL), Economic Opportunity

(EO), Softwood Timber (ST), Recreation (RL), and Rural Housing loans

for farm service buildings (RHF). Non-program (NP) farm type loans may

be serviced under this subpart for borrowers who also have program FP

loans. FP borrowers have until July 1, 1995, to request disaster set-

aside and submit a complete application. Requests received after this

date will not be accepted.

Sec. 1951.952 General.

Disaster set-aside is a program whereby borrowers who are current

or not more than 1 installment behind on any and all FP loans may be

permitted to move one Farmers Home Administration (FmHA) scheduled

annual installment(s) for each eligible FP loan to the end of the loan

term. Borrowers whose loans are restructured in accordance with subpart

S of this part after the disaster occurred are not eligible for the DSA

program. The intent of this program is to relieve some of the

borrower's immediate financial stress caused by the disaster and avoid

foreclosure by the Government.

Sec. 1951.953 Notification and Request for DSA.

(a) Notification. The County Supervisor will use form letter 1951-

1-T to notify FP borrowers of the availability of the DSA program and

how to apply. All FP borrowers, as defined in Sec. 1951.906 of subpart

S of this part, who operated a farm or ranch in a county during 1993 in

which a disaster occurred and was declared/designated as a disaster

area, or contiguous county, as set forth in subpart A of part 1945 of

this chapter will be notified within 10 days of the effective date of

this instruction. Notification of the DSA program will not affect the

notification requirements set forth in subpart S of this part.

(b) Request for DSA.

(1) All FP borrowers liable for the debt must request disaster set-

aside in writing prior to July 1, 1995.

(2) Borrowers must provide the County Supervisor with actual

production, income and expense figures for the production/marketing

period in which the 1993 disaster occurred, unless this information is

already in the borrower case file.

(3) Borrowers may only be considered for DSA one time.

(c) Eligibility requirements.

(1) The borrower operated a farm or ranch in a county declared/

designated a disaster area as set forth in subpart A of part 1945 of

this chapter, or a contiguous county to such an area based on a 1993

disaster. The borrower must have been operating the farm or ranch at

the time of the disaster.

(2) The borrower has acted in good faith as defined in

Sec. 1951.906 of subpart S of this part.

(3) All nonmonetary defaults have been resolved. This means that

even though the borrower has acted in good faith, he/she may still be

in default for reasons, such as, but not limited to: no longer farming,

prior lienholder foreclosure, bankruptcy, not properly maintaining

chattel and real estate security, not properly accounting for the sale

of security as agreed, or not carrying out any other agreements made

with FmHA.

(4) The borrower is current or not more than one installment behind

on any and all FP loans at the time the scheduled installment(s) will

be set-aside as reflected on the Finance Office 540 or 582 status

reports.

(5) The borrower's projected income for the disaster year was

reduced as a result of the disaster, causing insufficient income

available to pay all family living and operating expenses, pay debts to

other creditors and pay FmHA. This determination will be based on the

borrower's actual production and income and expense records for the

disaster year. Releases of normal income security will continue as set

forth in subpart A of part 1962 of this chapter.

(6) The term remaining on the loan(s) receiving set-aside equals or

exceeds 2 years from the due date of the installment being set-aside.

(7) All FP loans will be current after the scheduled installments

are set-aside.

Secs. 1951.954-1951.956 [Reserved]

Sec. 1951.957 Eligibility determination and processing.

(a) Eligibility determination. Upon receipt of a DSA request, the

County Supervisor will determine whether the borrower meets the

eligibility requirements set forth in Sec. 1951.953(c) of this subpart

and notify the borrower of the results within 30 days from the date of

the DSA request. The file shall contain documentation to reflect the

date of request and the date the borrower was notified and the addendum

signed.

(1) The borrower shall be provided up to 30 days to sign Exhibit A,

``Addendum to the Promissory Note/Assumption Agreement for the Disaster

Set-aside Program.'' If the addendum is not signed within 30 days and/

or prior to the borrower becoming more than 1 installment behind, the

DSA request will be withdrawn and the borrower notified of their appeal

rights under subpart B of part 1900 of this chapter.

(2) Pending requests for primary loan servicing will continue to be

considered as set forth in subpart S of this part. However, borrowers

cannot accept servicing under both programs.

(i) Borrowers determined eligible for the DSA and 1951-S servicing

will be required to choose between the two program requests. The choice

will be noted in the borrower case file and initialed by the borrower.

(ii) Borrowers may choose to proceed with the DSA prior to a

decision being made for primary loan servicing such as in cases where a

decision will not be available on the primary loan servicing

application prior to the borrower becoming more than 1 installment

behind.

(iii) The application for the program not chosen will automatically

be withdrawn at the time the installment(s) are set-aside or the

loan(s) restructured, whichever is applicable. This voluntary

withdrawal is not appealable.

(iv) By signing Exhibit A of this subpart, the borrower agrees to

the withdrawal of any pending request for primary loan servicing. The

borrower may resubmit a request at any time according to subpart S of

this part.

(b) Processing. Installments will be set-aside as set forth in this

paragraph.

(1) All borrowers liable for the debt will sign Exhibit A of this

subpart for each loan installment set-aside. Exhibit A may be modified

with the assistance of the Office of the General Counsel to comply with

individual State laws.

(2) Only one unpaid installment for each FP loan may be set-aside.

(i) The installment set-aside will be the first scheduled annual

installment due immediately after the disaster occurred, or if that

installment is paid current, the next scheduled annual installment.

Set-aside will not be granted on the loan if both of these installments

are paid current.

(ii) The amount set-aside will not exceed the annual scheduled

installment being set-aside minus any portion of that installment paid

prior to Exhibit A being signed by the borrower. This amount will

include the unpaid interest and any principal that would be credited to

the account as if the installment were paid on the due date.

(iii) Recoverable cost items charged to FO, SW, and RHF loans may

be set-aside with the annual installment. Cost items identified with a

loan number different from the parent loan cannot be set-aside.

(3) Interest will accrue on any principal amount set-aside at the

same rate charged the non-set-aside portion. Interest will not accrue

on the interest portion set-aside.

(4) The amount set-aside, including interest accrual on any

principal set-aside, will be due on or before the final due date of the

loan.

(5) There are no security requirements attached to the DSA program.

All existing security instruments will remain in effect.

(6) Exhibit A will be used as the source document to process the

set-aside through ADPS. Until automation capabilities are implemented,

Exhibit A should be placed in a pending file and the borrower's account

flagged ``51-S.'' The Finance Office borrower account status reports

will reflect the amount(s) set-aside for each loan.

(7) The National Automated Tracking System (AGCREDIT) will be

utilized to document the notification and servicing scheme associated

with this subpart.

(8) The loan(s) will be considered current after the installment(s)

is set-aside and, therefore, debt writedown or net recovery buyout may

not be subsequently approved under subpart S of this part, and loans

may not be made under Sec. 1941.14 of subpart A of part 1941 of this

chapter, unless the set-aside is reversed as set forth in

Sec. 1951.958(b)(2) of this subpart or the borrower becomes delinquent

on the non-set-aside portion.

(c) Adverse determination. Borrowers who do not meet the

requirements for the DSA program will be notified of their appeal

rights in accordance with subpart B of part 1900 of this chapter. If

the borrower becomes more than 1 installment behind on any FP loan

while processing the DSA request, or while an appeal is being

considered, the DSA request will be denied and/or any associated appeal

request withdrawn. Being denied set-aside based on the failure to meet

the not-more-than-1-installment-behind requirement is not an appealable

issue, but is reviewable. The letter to the borrower will describe in

full detail all the reasons for the adverse decision. Borrowers denied

set-aside will continue to be serviced in accordance with subpart S of

this part.

Sec. 1951.958 Supervision and servicing of borrowers with DSA.

(a) Supervision. Borrower supervision will continue as set forth in

subpart B of part 1924 of this chapter.

(b) Servicing. FP loans will continue to be serviced in accordance

with the appropriate servicing regulations.

(1) Payments applied to the amount set-aside will be processed as a

miscellaneous payment on Form FmHA 451-2, ``Schedule of Remittance.''

(2) The set-aside will be reversed and the addendum cancelled if,

prior to the first scheduled installment due date after set-aside, the

current borrower needs a writedown in order to develop a feasible plan

or a net recovery buyout in accordance with subpart S of this part, or

loan assistance set forth in Sec. 1941.14 of subpart A of part 1941 of

this chapter. The Finance Office must be notified by memorandum of the

set-aside reversal prior to the time assistance is granted. A copy of

the memorandum will be attached to the addendum.

(3) In cases not covered by paragraph (b)(2) of this section, the

set-aside will be considered automatically cancelled whenever a program

loan receives primary loan servicing.

Sec. 1951.959 Exception authority.

The Administrator may, in individual cases, make an exception to

any requirement or provision of this subpart or address any omission of

this subpart which is not inconsistent with the authorizing statute or

other applicable law if it is determined that application of the

requirement or provision or failure to take action in the case of an

omission would adversely affect the Government's interest. The

Administrator will exercise this authority upon the request of the

State Director, with the recommendation of the Assistant Administrator

for Farmer Programs; or upon request initiated by the Assistant

Administrator for Farmer Programs. Requests for exception must be made

in writing and supported with documentation to explain the adverse

effect and proposed alternative courses of action, and to show how the

adverse effect will be eliminated or minimized if the exception is

granted.

Secs. 1951.960-1951.999 [Reserved]

Sec. 1951.1000 OMB control number.

The collection of information requirements in this regulation have

been approved by the Office of Management and Budget and assigned OMB

control number [0000-0000]. Public reporting burden for this collection

of information is estimated to be 15 minutes per response, including

time for reviewing instructions, searching existing data sources,

gathering and maintaining the data needed, and completing and reviewing

the collection of information. Send comments regarding this burden

estimate or any other aspect of this collection of information,

including suggestions for reducing this burden, to Department of

Agriculture, Clearance Office OIRM, Room 404-W, Washington, D.C. 20250;

and to the Office of Management and Budget, Paperwork Reduction Project

(OMB#0000-0000), Washington, D.C. 20503.

Exhibit A of Subpart T--Addendum to the Promissory Note/Assumption

Agreement for the Disaster Set-Aside Program

Purpose: For use with the DSA program and to be signed by the

borrower and attached to the promissory note/assumption agreement.

Addendum to the Promissory Note/Assumption Agreement for the Disaster

Set-Aside Program

Date-------------------------------------------------------------------

Case Number------------------------------------------------------------

Name-------------------------------------------------------------------

Note/Assumption Agreement:

Fund Code--------------------------------------------------------------

Loan No.---------------------------------------------------------------

Date-------------------------------------------------------------------

Amount-----------------------------------------------------------------

This addendum amends the above described promissory note or

assumption agreement to set forth the terms and conditions for set-

aside of the installment described below.

Date of Scheduled Installment Set-Aside

----------------------------------------------------------------------

Amount of Installment Set-Aside:

Principal $------------------------------------------------------------

Interest---------------------------------------------------------------

Total $----------------------------------------------------------------

Any principal amount set-aside will continue to accrue interest at

the same rate being charged the non-set-aside portion of the note.

This addendum does not change any of the terms or conditions of the

promissory note/assumption agreement.

The undersigned borrower and any cosigners hereby agree to pay the

installment being set-aside, plus any accrued interest on the principal

amount set-aside, on or before the final due date of the loan, as set

forth on the note or assumption agreement being amended.

If the promissory note/assumption agreement is later restructured

through primary loan servicing, the addendum will automatically be

considered cancelled and the amount set-aside will be included in the

total debt restructured.

The undersigned borrower(s) understands that by signing this

addendum he/she is agreeing to the withdrawal of any pending request

for primary loan servicing. This withdrawal does not affect the

undersigned's future eligibility for primary loan servicing.

----------------------------------------------------------------------

Borrower

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Borrower

Dated: August 15, 1994.

Michael V. Dunn,

Administrator.

[FR Doc. 94-20434 Filed 8-18-94; 8:45 am]

BILLING CODE 3410-07-U