---
kind: "section"
citation: "7 C.F.R. § 766.111"
title: "7"
number: "766.111"
heading: "Write-down."
url: "https://uscodex.org/cfr/7/766.111"
---

# §766.111. Write-down.

- (a) **Borrower eligibility.** The Agency will only consider a write-down if the borrower:
  - (1) Meets the eligibility criteria in [§ 766.104](/cfr/7/766.104.md);
  - (2) Is delinquent;
  - (3) Has not previously received debt forgiveness on any FLP direct loan; and
  - (4) **Complies with the Highly Erodible Land and Wetland Conservation requirements of 7 CFR part 12.**
- (b) **Conditions.** The conditions required for approval of write-down are:
  - (1) Rescheduling, consolidation, reamortization, deferral or some ombination of these options on all of the borrower's loans would not result in a feasible plan with a 110 percent debt service margin. If a feasible plan is achieved with a debt service margin of 101 percent or more, the Agency will permit a borrower to accept a non-write-down servicing offer and waive the right to a write-down offer when the write-down offer will require additional time and appraisals to fully develop. If after obtaining an appraisal a feasible plan is achieved with and without a write-down and the borrower meets all the eligibility requirements, both options will be offered, and the borrower may choose one option.
  - (2) The present value of the restructured loan must be greater than or equal to the net recovery value of Agency security and any non-essential assets.
  - (3) The write-down amount, excluding debt reduction received through Conservation Contract, does not exceed $300,000.
  - (4) A borrower who owns real estate must execute an SAA in accordance with [§ 766.201](/cfr/7/766.201.md).
- (c) **Associated loan servicing.** Loans written down will also be serviced in accordance with §§ [766.107](/cfr/7/766.107.md) and [766.108](/cfr/7/766.108.md), as appropriate.

## Notes

### Amendments

[72 FR 63316, Nov. 8, 2007, as amended at 86 FR 43392, Aug. 9, 2021; 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 86 FR 43392, Aug. 9, 2021; 89 FR 65044, Aug. 8, 2024]