7 C.F.R. § 766.120

Current through November 30, 2024
Section 766.120 - Extending maturity date and installment schedule for direct loans with a balloon payment
(a) At a borrower's written request, the maturity date and installment schedule of a direct term loan with a balloon payment may be extended for up to an additional 8 years from the original maturity date using an addendum to the promissory note when the:
(1) Loan was originally amortized for no more than 15 years with a balloon payment scheduled in the final year of the loan;
(2) Loan has not received PLS, DBSA, or DSA;
(3) Borrower has made all scheduled loan installments in the last 36 months;
(4) Balloon payment is due in less than 12 months;
(5) Borrower does not have an outstanding DBSA or DSA on any loan;
(6) Borrower has not received PLS on any loan in the last 36 months;
(7) Borrower has only had equal installments scheduled on any direct term loan in the last 36 months;
(8) Borrower's direct loans are fully secured with each loan having a security value of at least 100 percent of the remaining balance of the loan;
(9) Borrower is unable to partially or fully graduate;
(10) Borrower has acted in good faith;
(11) Borrower is not otherwise financially distressed or delinquent;
(12) Borrower must pay a portion of the interest due on the loan; and
(13) Addendum is signed by the borrower before the original maturity date.
(b) In no event may the loan exceed applicable term limits described in this part.

7 C.F.R. §766.120

89 FR 65045 , 9/25/2024