---
kind: "section"
citation: "7 C.F.R. § 766.104"
title: "7"
number: "766.104"
heading: "Borrower eligibility requirements."
url: "https://uscodex.org/cfr/7/766.104"
---

# §766.104. Borrower eligibility requirements.

- (a) A borrower must meet the following eligibility requirements to be considered for primary loan servicing:
  - (1) The delinquency or financial distress is the result of reduced repayment ability due to one of the following circumstances beyond the borrower's control:
    - (i) Illness, injury, or death of a borrower or other individual who operates the farm;
    - (ii) Natural disaster, adverse weather, disease, or insect damage which caused severe loss of agricultural production;
    - (iii) Widespread economic conditions such as low commodity prices;
    - (iv) Damage or destruction of property essential to the farming operation;
    - (v) Loss of, or reduction in, the borrower or spouse's essential non-farm income; or
    - (vi) Catastrophic medical expenses for the care of a family member of the borrower or entity member, in the case of an entity borrower.
  - (2) The borrower does not have non-essential assets for which the net recovery value is sufficient to resolve the financial distress or pay the delinquent portion of the loan.
  - (3) If the borrower is in non-monetary default, the borrower will resolve the non-monetary default prior to closing the servicing action.
  - (4) **The borrower has acted in good faith.**
  - (5) Financially distressed or current borrowers requesting servicing must pay a portion of the interest due on the loans.
  - (6) The borrower must not be ineligible due to disqualification resulting from Federal crop insurance violation according to [7 CFR part 718](/cfr/7/part718.md).
- (b) **Debtors with SA only must—**
  - (1) Be delinquent due to circumstances beyond their control;
  - (2) **Have acted in good faith.**

## Notes

### Amendments

[72 FR 63316, Nov. 8, 2007, as amended at 89 FR 65044, Aug. 8, 2024]

### Authority

Authority: 5 U.S.C. 301, 7 U.S.C. 1989, and 1981d(c).

### Source

Source: 72 FR 63316, Nov. 8, 2007, unless otherwise noted.

### Amendments

[72 FR 63316, Nov. 8, 2007, as amended at 89 FR 65044, Aug. 8, 2024]