RD 1951-10 Community Programs Workout Agreement

UNITED STATES DEPARTMENT OF AGRICULTURE
RURAL HOUSING SERVICE
COMMUNITY PROGRAMS
WORKOUT AGREEMENT

Form RD 1951-10
(Rev 01-05)

FORM APPROVED
OMB No. 0575-0066

Date:
This Workout Agreement (Agreement) is made between
(Borrower) and the United States of America,
acting through the Department of Agriculture (Government).
The parties recite and declare that:
A.

The Borrower has the following Direct Community Facilities or Association Recreation
loans owed to the Government that are in default (if more space is needed, use an
attachment):

Loan
No.

Loan
Amount

Date
of Loan

Amount
Delinquent

Type of Default

B.

The Government has the right to declare the entire balance of these loans immediately
due and payable.

C.

The parties wish to avoid any acceleration or other collection action by the
Government by entering into this Agreement.

D.

For the reasons stated above, and in consideration of the mutual covenants and
promises of the parties, the Government and the Borrower agree as follows:
(1) Borrower will complete the following actions to resolve the defaults identified in
paragraph A above, by the following completion dates (if more space is needed, use
an attachment):
Action

Completion Date

According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid OMB control number. The valid
OMB control number for this information collection is 0575-0066. The time required to complete this information collection is estimated to average 1 hour per response, including the time for
reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Action

Completion Date

(2) The Government will not accelerate Borrower’s loans if each action is
completed to the satisfaction of the Government by the relevant completion
date.
(3) Failure of the Government to immediately exercise its rights to accelerate the
Borrower’s loans upon Borrower’s failing to comply with the terms of this
agreement will not preclude the Government from doing so for the same or a
subsequent default at a later time. Any such failure shall not be construed as
a waiver or relinquishment of the Government’s rights to any collection,
including subsequent acceleration.
(4) No other loan terms contained in the respective notes, bonds, mortgages, or
deeds of trust are modified by this Agreement.
(5) This Agreement shall be binding on the successors and assigns of the parties
and any present or subsequent owners, encumbrances, tenants, and subtenants.
(6) This Agreement may not be changed except in a written document signed by both
parties.
(7) If any part of this Agreement is determined to be illegal or unenforceable by
a court of competent jurisdiction, those other portions not affected by that
decision shall remain in effect.

Borrower

Date

Government

Date

Instructions: Type the name and title of the authorized person signing for the Borrower
and the Government under their signature.

Part II – Supporting information to be furnished by the Rural Development Servicing
Office
Borrower Name
Case No.

State

County

Brief History of the Facility:

Reason(s) for Default (Explain):

Signature – Servicing Official

Date

Instructions for Preparation
Note: A copy of this form is to be sent to the National Office to provide documentation
for servicing action taken under the Debt Collection Improvement Act.
1.
2.
3.

4.
5.
6.

7.
8.

9.
10.
11.
12.
13.
14.
15.

Insert the date of the agreement as Month, Day, Year. Example: May 28, 2004.
Insert the name of the borrower organization as shown in Agency records.
Insert the loan number(s) in this column for all loans. If the borrower has more
than 6 loans, insert “Multi” in lieu of the loan number for loan 6.
Example: 97-01.
Insert the Loan Amount for each loan listed or the sum of loans included on an
attachment to the workout agreement in lieu of the amount for loan 6.
Insert the date of the promissory note. Leave blank if “Multi” was inserted for loan
6.
Insert the total amount of interest and principal that is delinquent as of the date
of the agreement. Insert the sum of delinquent amounts when “Multi” is used in lieu
of loan 6. For non-monetary default, leave blank.
Insert the type of default. For non-monetary defaults, insert the specific nonmonetary default. Examples: Monetary or Unauthorized sale of security.
Insert the positive actions agreed to between the borrower and the Agency that will
remove the default conditions. Positive actions include but are not limited to
activities that will increase revenue, decrease expenses, change operating
efficiencies, changes to management, and a modified repayment plan. Examples:
“Increase fees for services two (2) percent,” “Reduce inventory to a 20 day supply
to reduce interest cost on line of credit,” or “Will make additional monthly payment
of $___ until the account is current.”
Insert the anticipated target date for completion of the agreed upon action needed to
remove the default condition.
The person authorized to sign the document for the borrower will sign the form with a
full legal signature.
The borrower representative will insert the date when the workout agreement is
signed.
Print or type the full name and title of the person signing the workout agreement for
the borrower.
The authorized servicing official will sign the workout agreement for the government.
The Agency’s representative will insert the date when the workout agreement is
signed.
Print or type the full name and title of the person signing the workout agreement for
the Agency.

Part II.
Part II of the workout agreement is used by the Agency to document a summary of the
facility, a summary of the default situation, and a recommendation for future servicing
of the account.
16.
17.
18.
19.
20.

21.

22.
23.
24.

Insert the name of the borrower organization as shown in Agency records.
Insert the Agency assigned case number in the following format XX-0XX-0XXXXXXXXX.
Insert the name of the State where the facility is located.
Insert the name of the county or comparable political subdivision.
Insert a summary of the facility’s history to include the date the facility opened in
its current location, the capacity of the facility, the type of facility, and
important events showing growth, decline, or stability of the facility.
Insert a summary of the reason(s) for default. The summary should include sufficient
detail to assist someone not familiar with the facility operation or history to
understand the reason for default and contributing factors that when removed or
mitigated will remove the default over time.
The servicing official signs above the line.
Insert the date when the servicing official signs Part II.
Print or type the name of the servicing official.