The borrower must provide an annual audited financial statement, and the lender must forward it to Rural Development

rd538.reporting.annual_audited_financial_statement_through_the_lender · v1.0.0

A Section 538 borrower must maintain complete project books and financial records and provide the Agency and the lender with an annual audited financial statement after the end of each fiscal year - a covenant the regulatory agreement executed at loan closing is required to contain. At a minimum the LENDER must obtain, on an annual basis, an audited annual financial statement conducted in accordance with generally accepted government auditing standards, review it to confirm the property is in sound fiscal condition and the borrower is in compliance, submit a copy to the Agency, and report on the nature and status of any findings, including a plan of action for any that remain unresolved. The lender must additionally submit MONTHLY reports to the Agency on every loan that is in default, delinquent, or not in compliance with programme requirements.

Confidence

high

Effective from

1998-07-22

Last reviewed

2026-08-30