Section 765.101 - Borrower graduation requirements(a) In accordance with the promissory note and security instruments, the borrower must graduate to another source of credit if the Agency determines that: (1) The borrower has the ability to obtain credit from other sources; and(2) Adequate credit is available from other sources at reasonable rates and terms.(b) The Agency may require partial or full graduation.(1) In a partial graduation, all FLP loans of one type (i.e. all chattel loans or all real estate loans) must be paid in full by refinancing with other credit with or without an Agency guarantee.(2) In a full graduation, all FLP loans are paid in full by refinancing with other credit with or without an Agency guarantee.(3) A loan made for chattel and real estate purposes will be categorized according to how the majority of the loan's funds are expended.(c) The borrower must submit all information that the Agency requests in conjunction with the review of the borrower's financial condition, including Federal income tax returns.(d) The Agency may provide a borrower's prospectus to lenders in an attempt to identify sources of non-Agency credit and assess the lenders' interest in refinancing the borrower's loan. The Agency will notify the borrower when the borrower's prospectus is provided to one or more lenders.(e) If a lender expresses an interest in refinancing the borrower's FLP loan, the borrower must: (1) Apply for a loan from the interested lender within 30 days of notice; or(2) Seek guaranteed loan assistance under the market placement program in accordance with § 762.110(g) of this chapter.(f) The borrower will be responsible for any application fees or purchase of stock in conjunction with graduation.(g) CLs are not subject to graduation requirements under this part. 72 FR 63309 , Nov. 8, 2007, as amended at 75 FR 54016 , Sept. 3, 2010