(a) General review. The Agency will evaluate the application and make a determination whether the borrower is eligible, the proposed loan is for an eligible purpose, there is reasonable assurance of repayment ability, there is sufficient collateral and equity, and the proposed loan complies with all applicable statutes and regulations. If the Agency determines it is unable to guarantee the loan, it will inform the lender in writing.

(b) Environmental requirements. The environmental review process must be completed, in accordance with 7 CFR part 1970, “Environmental Policies and Procedures,” or successor regulation, prior to loan approval.