7 CFR 766.120: Extending maturity date and installment schedule for direct loans with a balloon payment.

(a) At a borrower's written request, the maturity date and installment schedule of a direct term loan with a balloon payment may be extended for up to an additional 8 years from the original maturity date using an addendum to the promissory note when the:

(1) Loan was originally amortized for no more than 15 years with a balloon payment scheduled in the final year of the loan;

(2) Loan has not received PLS, DBSA, or DSA;

(3) Borrower has made all scheduled loan installments in the last 36 months;

(4) Balloon payment is due in less than 12 months;

(5) Borrower does not have an outstanding DBSA or DSA on any loan;

(6) Borrower has not received PLS on any loan in the last 36 months;

(7) Borrower has only had equal installments scheduled on any direct term loan in the last 36 months;

(8) Borrower's direct loans are fully secured with each loan having a security value of at least 100 percent of the remaining balance of the loan;

(9) Borrower is unable to partially or fully graduate;

(10) Borrower has acted in good faith;

(11) Borrower is not otherwise financially distressed or delinquent;

(12) Borrower must pay a portion of the interest due on the loan; and

(13) Addendum is signed by the borrower before the original maturity date.

(b) In no event may the loan exceed applicable term limits described in this part.