RD 3560-33a Consolidated Loan Agreement

Form RD 3560-33A
(02-05)

UNITED STATES DEPARTMENT OF AGRICULTURE
RURAL DEVELOPMENT
RURAL HOUSING SERVICE

FORM APPROVED
OMB NO. 0575-0189

CONSOLIDATED LOAN AGREEMENT
RRH Insured Loan to an Individual Operating on a Profit Basis
or
RRH Loan to an Individual Operating on a Limited Profit Basis
or
RRH Loan to a Limited Liability Company

1.

Parties and Terms Defined: This agreement dated _____________________________________________

between the undersigned ________________________________________________ , (Borrower), whether one or more,
whose address is _______________________________________________ , and the United States of America acting
through the Rural Housing Service or a successor agency, United States Department of Agriculture, (Government), is made in
consideration of loans, (Loans), to Borrower in the amount of $ _______________ made or insured, or to be made or insured,
by the Government pursuant to section 515(b) of the Housing Act of 1949 to build ____________________________________
_________________________________________ projects. The loans may be sold and insured by the Government. The
loans shall be used solely for the specific eligible purposes for which they are approved by the Government in order to provide
rental housing and related facilities for eligible occupants, as defined by the Government in rural areas. Such housing, facilities,
and the land constituting the site are herein called “Housing”. The indebtedness and other obligations of Borrower under the
notes evidencing the loans, the related security instrument and any related agreement are herein called “Loan Obligations.”
2.

The following projects are consolidated which involved _______________ loans: _________________________

___________________________________________________________________________________________________
___________________________________________________________________________________________________
3. Execution of Loan Instruments. To evidence the loans the Borrower has issued promissory notes (Notes), signed
by the Borrower for the amount of the loans, payable in installments over a period of ___________ years, bearing interest at
a rate, and containing other terms and conditions, prescribed by the Government. To secure the notes or any indemnity or
other agreement required by the Government, the Borrower is to execute a real estate security instrument giving a lien upon the
Housing and upon such other real property of the Borrower as the Government shall require, including an assignment of the
rents, subsidies, revenues and profits as collateral security to be enforced in the event of any default by the Borrower, and
containing other terms and conditions prescribed by the Government. The Borrower is to execute any other security
instruments and other instruments and documents required by the Government in connection with the making or insuring of
the loans.

4. Equal Opportunity and Nondiscrimination Provisions. The Borrower will comply with (a) any undertakings and
agreements required by the Government pursuant to Title VIII of the Civil Rights Act of 1968 as amended by the Fair Housing
Amendments Act of 1988 related to Fair Housing regarding nondiscrimination in the use and occupancy of housing, (b) Form
RD 400-1 entitled “Equal Opportunity Agreement”, including an “Equal Opportunity Clause” to be incorporated in or attached
as a rider to each construction contract the amount of which exceeds $10,000 and any part of which is paid for with funds from
the loan, and (c) Form RD 400-4, entitled “Assurance Agreement (under Title VI, Civil Rights Act of 1964)”, a copy of which is
attached hereto and made a part hereof, and any other undertakings and agreements required by the Government pursuant to
lawful authority.

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 0575-0189. 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.

5. Borrower Equity Contribution. The amount of $ ___________________________________ was contributed
from the Borrower’s own funds for land purchase or development.
6. Accounts for Housing Operations and Loan Servicing. The Borrower shall establish on its books the following
accounts, which shall be maintained so long as the loan obligations remain unsatisfied: a General Operating Account, a
Tenant Security Deposit Account and a Reserve Account.
a.

General Operating Account. The Borrower shall from the Borrower’s own funds deposit in the General

Operating Account the total amount of $ _______________________________ consisting of the individual amounts
listed in the loan agreements being consolidated.
b. Reserve Account. Transfers at a rate not less than $ _________________________ annually which is the
total of the amounts listed in the loan agreements being consolidated shall be made to the Reserve Account until the
amount in the Reserve Account reaches the minimum sum of $ _______________________________ or such higher
amount later agreed to by the Government and shall be resumed at any time when necessary, because of disbursements
authorized by the Government from the Reserve Account to restore it to said sum. Withdrawal and use of funds
deposited to this account will be in accordance with 7 CFR part 3560, or any successor regulation. With prior consent of
the Government, funds in the Reserve Account may be used by the Borrower:
1) For any purpose desired by the Borrower, provided the Borrower determines that after such disbursement
(a) the amount in the Reserve Account will be not less than that required by this section to be accumulated by that
time (less any disbursements authorized by the Government), and (b) the amount in the Reserve Account will likely
not fall below that required to be accumulated during the next 12 months.
2)

To pay dividends to the Borrower agreeing to limit the amount of profit to be obtained up to 8 percent per

annum of the Borrower’s initial investment of $ ____________________ provided the Borrower determines that
after such disbursement (a) the amount in the Reserve Account will be not less than that required by this section to
be accumulated by that time (less any disbursements authorized by the Government), and (b) the amount in the
Reserve Account will likely not fall below that required to be accumulated during the next 12 months.
7. Regulatory Covenants. So long as the Loan Obligations remain unsatisfied, the Borrower shall comply with all
appropriate regulations of the Government and shall:
a. Impose and collect such fees, assessments, rents, and charges that the income of the Housing will be sufficient
at all times for operation and maintenance of the Housing, payments on the Loan Obligations, and maintenance of the
required accounts.
b. Establish and maintain complete books and records relating to the Housing’s financial affairs, cause such
books and records to be audited at the end of each fiscal year, promptly furnish the Government without request a copy
of each audit report, and permit the Government or its representative to inspect such books and records at all reasonable
times.
c. If required or permitted by the Government, revise the accounts herein provided for, or establish new accounts,
to cover handling and disposition of income from and payment of expenses attributable to the Housing or to any other
property securing the Loan Obligations, and submit regular and special reports concerning the Housing or financial
affairs.
d.

Unless the Government gives prior consent:

1) Not use the Housing for any purpose other than as rental housing and related facilities for eligible
occupants.
2) Not enter into any contract or agreement for improvements or extensions to the Housing or other property
securing the Loan Obligations.

3) Not cause or permit any transfer or encumbrance of title to the Housing or any part thereof or interest
therein, by sale, mortgage, lease, or otherwise.
4)
e.

Not borrow any money, nor incur any liability which would have a detrimental effect on the Housing.

Submit the reports required under 7 CFR part 3560 or any successor regulation for prior review.

f. Take other actions as may be required by the Government in connection with the operation of the Housing, or
with any of the Borrower’s operations or affairs which may affect the Housing, the Loan Obligations, or the security.
g. If the return on investment for any year exceeds 8 percent annum of Borrower’s initial investment of
$ _______________________________ the Government may require that the Borrower reduce rents the following
year or refund the excess return on the investment to the tenants or use the excess in a manner that will best benefit the
tenants.
8.

General Provisions.
a. It is understood and agreed by the Borrower that any loan made or insured will be administered subject to the
limitations of the authorizing act of Congress and related regulations, and that any rights granted to the Government in
this agreement or elsewhere may be exercised by it, in its sole discretion.
b. Borrower shall also comply with all covenants and agreements set forth in the Note, security instrument, and
any related agreements executed by Borrower in connection with the Loan Obligations.
c. The provisions of this agreement are representations to the Government, to induce the Government, to
consolidate the loan agreements of or insure a loan to the Borrower. If the Borrower should fail to comply with or perform
any provision of this agreement or any requirement made by the Government pursuant to this agreement, such failure
shall constitute default as fully as default in payment of amounts due on the Loan Obligations. In the event of such
failure, the Government at its option may require specific performance or declare the entire amount of the Loan
Obligations immediately due and payable and, if such entire amount is not immediately paid, may take possession of and
operate the Housing and proceed to foreclose its security and enforce all other available remedies or take such other
actions as it deems necessary to enforce the provisions of this agreement.
d. To the extent legally permitted, any provisions of this agreement may be waived by the Government in its sole
discretion, or changed by agreement between the Government and the Borrower.
e.

Any notice, consent, approval, waiver, amendment, or agreement must be in writing.

f. The Borrower agrees that no person with a disability will be subjected to discrimination in employment or
denied the benefits of the Housing because of such disability. The Borrower will comply with the requirements of the
Fair Housing Act, 42 U.S.C. 3601 et seq., the Fair Housing Amendments Act of 1988, the Rehabilitation Act of 1973, 29
U.S.C. 794, the American with Disabilities Act of 1990, 42 U.S.C. 12101 et seq., and the implementing regulations of the
Department of Agriculture, 7 CFR part 15(b).
g. This Consolidated Loan Agreement shall be subject to the present and future laws and regulations of the
Government.
h. This agreement may be cited in the security instrument and any other instruments as the “Consolidated Loan
Agreement of ________________________________________ , 20____.”
i.

Borrower previously entered into Loan Agreements with the Government having the following dates

___________________________________________________________________________________________________.
All such previous loan agreements are consolidated into this Consolidated Loan Agreement and the multifamily
housing units covered by such previous loan agreements shall be operated as a single project under the terms and
conditions of this Consolidated Loan Agreement. Violation of this Consolidated Loan Agreement shall constitute an
event of default under the security instruments which may be described in such previous loan agreements.

Position 2

Borrower has delivered to Government several evidences of debt which provided for payments on various days of each
month. To provide for orderly administration of the indebtedness, Borrower agrees to change the scheduled payment date on
the following promissory notes, assumption agreements, or reamortization agreements to the first day of each following month
until the debt evidenced by each instrument described is paid in full:
Date

j.

Amount

Date

Amount

This Consolidated Loan Agreement shall be effective on the date it is approved by the Government.

__________________________________________
Witness

__________________________________________
Borrower

__________________________________________
Witness

__________________________________________
Borrower

__________________________________________
(Approval Date)

__________________________________________
(Approval Official)