(1) Sale of all or a portion of the security property may be approved when all of the following conditions are met:
(i) The property is sold for market value based on a current appraisal prepared in accordance with § 761.7 of this chapter.
(ii) The sale will not prevent carrying out the original purpose of the loan. The borrower must execute an Assurance Agreement as prescribed by the Agency. The covenant involved will remain in effect as long as the property continues to be used for the same or similar purposes for which the loan was made. The instrument of conveyance will contain the following nondiscrimination covenant:
The property described herein was obtained or improved with Federal financial assistance and is subject to the non-discrimination provisions of title VI of the Civil Rights Act of 1964, title IX of the Education Amendments of 1972, section 504 of the Rehabilitation Act of 1973, and other similarly worded Federal statutes, and the regulations issued pursuant thereto that prohibit discrimination on the basis of race, color, national origin, handicap, religion, age, or sex in programs or activities receiving Federal financial assistance. Such provisions apply for as long as the property continues to be used for the same or similar purposes for which the Federal assistance was extended, or for so long as the purchaser owns it, whichever is later.
(iii) The remaining security for the loan is adequate or will not change after the transaction.
(iv) Sale proceeds remaining after paying any reasonable and necessary selling expenses are applied to the Minor Program loan according to lien priority.
(2) Exchange of all or a portion of security property for an AMP loan may be approved when:
(i) The Agency will obtain a lien on the property acquired in the exchange;
(ii) Property more suited to the borrower's needs related to the purposes of the loan is to be acquired in the exchange;
(iii) The AMP loan will be as adequately secured after the transaction as before; and
(iv) It is necessary to develop or enlarge the facility, improve the borrower's debt-paying ability, place the operation on a more sound financial basis or otherwise further the loan objectives and purposes, as determined by the Agency.
(b) For IMP loans, a sale or exchange of real estate or chattel that is serving as security must be done as specified in part 765 of this chapter.