RD 4280-6 Loan - Letter of Conditions

Form RD 4280-6
(06-07)

Form Approved
OMB No. 0570-0035

RURAL ECONOMIC DEVELOPMENT LOAN
LETTER OF CONDITIONS
Date:

Name President
Utility
Address
City, State, Zip

Dear Mr. or Mrs.

:

,
We are pleased to announce that the application of the
(''Intermediary'') for a zero-interest loan in the amount of
(''Loan'') to partially finance a loan to
(''Ultimate
Recipient'') for the project known as,
located in [town,
county, State] (''Project''), for the purpose of
has
received approval of Rural Development, subject to the following terms and conditions:
A.

The Intermediary will:
1.

deliver satisfactory evidence to Rural Development that the Ultimate
Recipient has obtained or received binding commitments for supplemental
that is needed, in addition to the
financing of at least
Loan proceeds, to ensure completion of the Project.

2.

establish a Loan payment system using the Automated Clearing HouseCustomer Initiated Payment (ACH-CIP) method. These steps include:
(i)

sending a canceled or voided check on the account that the
Intermediary will use to make payments on the Loan to the Rural
Development Finance Office, and

(ii)

completing and submitting to Rural Development an ACH-CIP
enrollment form with the Intermediary's canceled or voided check.
Establishment of the ACH-CIP account will be handled by

According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not 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 0570-0035. The time required to complete this information collection is estimated to average one
hour 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.

Mellon Bank, Pittsburgh, PA, and a personal identification number
(PIN) will be issued directly to the Intermediary by Mellon Bank.
Payment instructions will be issued to the Intermediary by the
Rural Development Finance Office.
3.

execute and return to the Rural Development State office at the address
below, the enclosed original Promissory Note, original Rural
Development Loan Agreement, and duplicate original of the Letter of
Conditions.

4.

execute and deliver its Promissory Note to Rural Development in the form
attached hereto.

5.

submit ''Certification Regarding Debarment, Suspension, Ineligibility and
Voluntary Exclusion - Lower Tier Covered Transactions'' properly signed
by the Ultimate Recipient.

6.

certify that no adverse actions have occurred since the application was
approved.

And,
B.

Rural Development approval of:
1.

the Rural Development Loan Agreement, the Rural Development
Promissory Note, and any security agreement which will be entered into
between the Intermediary and the Ultimate Recipient.

2.

a draft version of a legal opinion from both the Intermediary's and the
Ultimate Recipient's respective attorneys, in the form of a typical opinion
given to a lender in the Project State in commercial loan transactions,
opining as to the legal authority of the entities to execute the Promissory
Note and perform its obligations under the Rural Development Loan
Agreement. Any legal issues identified by the Intermediary's counsel
should be discussed and agreed to by counsel and the Rural Development
State office before the executed legal opinion is sent to the Rural
Development.

C.

The Loan is also subject to the following conditions:
1.
2.

Please evidence your acceptance of the terms and conditions of this Letter of Conditions
by executing and dating the enclosed duplicate original in the space provided and returning
it to the State Office address below within 60 days from the date of this Letter of
Conditions.
After closing, the Intermediary may request funds by submitting a letter, signed by an
authorized official and addressed to the National office address shown below, requesting
the advance of Loan funds for specific Approved Purposes as described by this Letter of
Conditions and the enclosed Rural Development Loan Agreement.
Unless otherwise extended, if the Intermediary fails to satisfy all conditions and
requirements within 120 days of the Intermediary's acceptance of the terms and
conditions of the Letter of Conditions then this Letter of Conditions will terminate.
Sincerely,

State Director

Accepted and Agreed to:

Intermediary

by:
Resident

(SEAL)
Attested to for the Intermediary:
by:
Secretary

Date

State Office Address

National Office Address

Enclosures:
• Duplicate Original Letter of Conditions
• Rural Development Loan Agreement
• Promissory Note
• Certification Regarding Debarment, Suspension, Ineligibility and
Voluntary Exclusion - Lower Tier Covered Transactions