---
kind: "section"
citation: "7 C.F.R. § 3550.206"
title: "7"
number: "3550.206"
heading: "Protective advances."
url: "https://uscodex.org/cfr/7/3550.206"
---

# §3550.206. Protective advances.


RHS may pay for fees or services and charge the cost against the borrower's account to protect the Governments interest.

- (a) **Advances for taxes and insurance.** RHS may advance funds to pay real estate taxes, hazard and flood insurance premiums, and other related costs, as well as amounts needed to fund the current escrow cycle.
- (b) **Advances for costs other than taxes and insurance.** Protective advances for costs other than taxes and insurance, such as emergency repairs, will be made only if the borrower cannot obtain a subsequent loan.
- (c) **Repayment arrangements.**
  - (1) Advances for borrowers with multiple loans will be charged against the largest loan.
  - (2) Amounts advanced will be due with the next scheduled payment. RHS may schedule repayment consistent with the borrowers ability to repay or reamortize the loan.
  - (3) Advances will bear interest at the promissory note rate of the loan to which the advance was charged.

## Notes

### Authority

Authority: 5 U.S.C. 301; 42 U.S.C. 1480.

### Source

Source: 61 FR 59779, Nov. 22, 1996, unless otherwise noted.