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B-189712 1 (1981-09-23)

handle is hein.gao/gaobadjsw0001 and id is 1 raw text is: DECISION FILE: B-189712 THE COMPTROLLER GENERAL OF THE UNITEO STATES WASHINGTON. D. C. 20548 DATE: Septe mber 23? 19-81 MATTER OF: Farmers Home Administration-Loan Guarantee Program a. DIGEST: //(0 2O 1. Loan guarantee by Farmers Home Administration (FmHA) initially charged against level of guarantee authority for particular fiscal year in which guarantee was first ap- proved cannot, as general rule, continue to be charged against the authority for that year when entirely new borrower is substituted in subsequent fiscal year, since determination of whether to approve guaranteed loan to particular borrower is an individual one requiring specific eligibility determination by FmHA. However, if substituted borrower bears close and genuine relation- ship to original borrower, such as would exist between corporation and partnership controlled by same individuals, and loan purpose remains substantially unchanged, FTHA would have authority to charge loan guarantee to substitute borrower against ceiling for fiscal year in which original guarantee was approved. 2. Loan guarantee by FmHA initially charged against level of loan guarantee authority for particular fiscal year in which guarantee was first approved cannot continue to be charged against ceiling for that year when major changes to character of the project or loan terms occur during sub- sequent fiscal year. However, if less substantial changes are involved where the purpose and scope of the revised loan guarantee agreement are consistent with the purpose and scope of the original guarantee and the need for the project continues to exist, FmHa would have authority to charge amended loan guarantee against ceiling for fiscal year in which it was first approved. 3. Loan guarantee by FrrJ A initially charged against level of loan guarantee authority for particular fiscal year in which guarantee was first approved can continue to be charged against authority for that year if new guaranteed lender is substituted in subsequent fiscal year, provided the borrower, loan purpose, and loan term remain substantially unchanged. Although the guarantee is actually extended to the lender, the lender is merely a conduit through which FmHA provides assistance to an eligible borrower to achieve the statutory objectives. Therefore new lender can be designated without changing the essence of the agreement.

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