The beginning farmer may apply (on forms approved by the corporation) for a beginning farmer loan with any lender. Any loan approved will be assigned to that lender. Eligibility for a beginning farmer loan is determined by the requirements of the act and the rules of the corporation. All terms and conditions of a loan must be agreed upon between the beginning farmer and the lender, which terms and conditions may not be any more onerous than those charged to similar customers for similar loans, but taking into account the tax-exempt nature of interest on the loan. Following completion of the application by the beginning farmer and approval by the lender, the application must be submitted to the corporation for review and approval by the corporation. The review will include, but not be limited to, whether:

If the corporation, in consultation with the department, determines that any of the foregoing conditions have not been satisfied, it may deny the application. As part of its review, the corporation may require the beginning farmer to submit appraisals on part or all of the property being financed by the loan or to submit any or all other documents and information as may be necessary to complete its review of the loan application.

(b) Following approval of the loan and issuance of the bond, the corporation will enter into a loan agreement or financing agreement with the beginning farmer and then assign the non-recourse loan to the lender. The corporation may charge fees as necessary to defray its costs for processing the loan and bond. Issuance of bond. Following approval of the loan by the corporation, and upon obtaining all necessary approvals, the corporation will issue a bond, to be purchased by the lender or bond purchaser, in the same amount and consistent with the repayment terms of the loan to the beginning farmer. The principal and interest on the bond is a limited obligation payable solely out of the revenues derived from the loan or finance agreement, debt obligation or sales contract with the beginning farmer and the underlying collateral or other security furnished by or on behalf of the beginning farmer. The lender or bond purchaser shall have no other recourse against the corporation. The principal and interest on the bond does not constitute an indebtedness of the corporation or the State of New York or a charge against its general credit or general fund.

Applications shall be processed by the corporation on a first-come, first-served basis, based upon the receipt of a completed application as so determined in the sole discretion of the corporation.

No bond proceeds may be used for a nonqualified purpose or by a nonqualified user. Following disbursement of the bond proceeds, the lender and beginning farmer may be required to certify to the corporation that the proceeds were used by the qualified beginning farmer for a qualified purpose.

A lender or bond purchaser may assign a loan in whole or in part to any person as defined in PAL section 1281. Servicing of the loan may also be assigned, but must at all times be with a lender or bond purchaser as defined herein. The corporation must be notified in writing prior to any assignment of the loan.

Loans may not be assumed without the prior written approval of the corporation, and then only if the purchaser of the property is an eligible applicant for a NYBFLP loan. Equipment and other depreciable property may be exchanged or traded for similar property, and other property such as breeding livestock may be added or substituted as collateral at the discretion of the lender or bond purchaser without the prior approval of the corporation. The benefits of the loan made at the tax-exempt rate from the proceeds of a corporation bond must remain with a qualified beginning farmer, and no person to whom property is traded or otherwise transferred may obtain the benefits of the corporation loan.

The corporation, in consultation with the department, shall have at any time the right to audit the records of the lender or bond purchaser and the beginning farmer relating to any loan and bond hereunder.