Resolution CMN No. 3231 — Amends Conditions for Financing with Resources from the Land and Agrarian Reform Fund

RESOLUTION NO. 003231

Amends the conditions applicable to financing with resources from the Land and Agrarian Reform Fund, governed by Complementary Law 93 of 1998 and Decree 4.892 of 2003.

The CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law 4.595 of December 31, 1964, makes public that the NATIONAL MONETARY COUNCIL, in a session held on August 26, 2004, considering the provisions of Article 4, item VI, of the aforementioned law, and Articles 4 and 14 of Law 4.829 of November 5, 1965, Complementary Law 93 of February 4, 1998, and Article 11, paragraph 4, of Decree 4.892 of December 25, 2003,

RESOLVES:

Art. 1 Establish that financing for the acquisition of rural property with existing improvements, supported by resources from the Land and Agrarian Reform Fund, shall be subject to the following conditions:

I - credit limit: up to R$40,000.00 (forty thousand reais) per beneficiary, covering up to 100% (one hundred percent) of the value of the items subject to financing, provided that the approval of the operation is conditioned upon the presentation of a financing proposal demonstrating the technical and economic-financial viability of the rural activity to be explored and, in the case of the financing referred to in paragraph 1, item I, the necessity of the investments;

II - terms, established based on the payment capacity to be generated by the enterprise:

a) for financing up to R$15,000.00 (fifteen thousand reais), up to fourteen years, including up to 24 months of grace period;

b) for financing amounts above R$15,000.00 (fifteen thousand reais), up to seventeen years, including up to 24 months of grace period;

III - guarantee: mortgage or fiduciary alienation of the financed property, and in the case of financing to associations or cooperatives, fiduciary guarantee from the beneficiary members or partners of the Land and Agrarian Reform Fund must be required cumulatively;

IV - financial charges: applicable based on the amount financed per beneficiary, the following effective interest rates:

a) up to R$5,000.00 (five thousand reais): 3% p.a. (three percent per year);

b) above R$5,000.00 (five thousand reais) and up to R$15,000.00 (fifteen thousand reais): 4% p.a. (four percent per year);

c) above R$15,000.00 (fifteen thousand reais) and up to R$25,000.00 (twenty-five thousand reais): 5.5% p.a. (five and five-tenths percent per year);

d) above R$25,000.00 (twenty-five thousand reais): 6.5% p.a. (six and five-tenths percent per year);

V - benefits: conditioned on the execution of actions provided in the respective financing proposals, guidelines, norms, and methods of proof to be established in the operational regulation, according to the table in this item:

a) fixed compliance bonus, based on the region where the financed property is located, applicable to the total of financial charges and principal of each installment, exclusively when payments are made by their respective due dates;

b) additional compliance bonus of up to 10% (ten percent), for financing granted in the Northeast Region and the area of the Northeast Development Agency (Adene) in the States of Minas Gerais and Espírito Santo, and up to 5% (five percent), for financing in other regions, granted on the financial charges and principal of each installment regarding the value of the property acquisition, when this is effected at a value lower than the reference value established for each case, communicated to the financial agent by the State or Regional Technical Unit, as defined in the operational regulation of the Land Fund;

Region where the financed property is located	Fixed Bonus	Additional Compliance Bonus up to
Semi-arid Northeast Region and Adene area in the States of Minas Gerais (MG) and Espírito Santo (ES)	40%	10%
Rest of the Northeast Region	30%	10%
Central-West, North, and Southeast Regions, except São Paulo	18%	5%
South Region and São Paulo	15%	5%

VI - remuneration of the financial agent: for financing granted based on Resolution 3,176 of March 8, 2004, a fixed rate of 0.7% p.a. (seven-tenths percent per year) on the outstanding balance, plus 3% (three percent) on payments made by borrowers.

§ 1 The financing referred to in item I also includes the following items:

I - basic investments for the initial structuring of productive units of acquired properties, thus considered investments in basic infrastructure, such as construction or renovation of residence, provision of water for human and animal consumption, electrification network, opening or recovery of internal access roads and construction or renovation of fences, as well as family maintenance during the first six months of the project and investments for the initial implementation of the rural activity to be explored, including up to R$720.00 (seven hundred and twenty reais) for the hiring of technical assistance for the implementation and monitoring of the execution of the financing project, as established in the operational regulation of the Land Fund;

II - other costs, thus considered taxes, fees, and notarial expenses of the transaction and registration of the acquired rural property, as well as topographic expenses related to the demarcation of plots.

§ 2 The value of financing intended for basic investments referred to in paragraph 1, item I, may not exceed, per beneficiary, 50% (fifty percent) of the total value of the financing or R$9,000.00 (nine thousand reais), whichever is lower.

§ 3 The value of each amortization installment shall be obtained by dividing the outstanding balance by the number of remaining installments, except as provided in paragraph 4.

§ 4 In financing up to R$15,000.00 (fifteen thousand reais) in the first payment, after the grace period, the borrower shall pay only the interest corresponding to the first twelve months of the financing.

§ 5 The sum of the compliance bonuses referred to in item V shall have a ceiling of R$1,000.00 (one thousand reais) per annual amortization installment of the financing.

§ 6 In the event of early payment of an installment, after the eighth year of the contract's effectiveness, the managing body of the Land and Agrarian Reform Fund shall grant, in the manner established in the operational regulation, discounts of up to 9% p.a. (nine percent per year) on the installment, calculated pro-rata for the period of early payment.

§ 7 Credit instruments must contain a clause establishing that financial charges may be reviewed annually by the National Monetary Council, up to a limit of 12% p.a. (twelve percent per year).

§ 8 The remuneration of the financial agent may be periodically reassessed based on compliance indices and the volume of resources made available for application in the program.

Art. 2 When the financing of the basic investments provided for in Art. 1, paragraph 1, item I, is replaced by financing of subprojects of community investments, including the component intended for youth, as defined in the Land Credit and Rural Poverty Combat Project, object of Loan Agreement 7037-BR, approved by Resolution 5 of May 15, 2001, of the Federal Senate, the limits and financing conditions provided for in the Project Operations Manual must be observed.

Art. 3 As a consequence of the provisions contained in this resolution, the sheets necessary for the update of the Rural Credit Manual (MCR) are attached.

Art. 4 This resolution enters into force on the date of its publication.

Art. 5 Resolution 3,176 of March 8, 2004, is hereby revoked.

Rio de Janeiro, August 31, 2004

Henrique de Campos Meirelles
President

TITLE: RURAL CREDIT
CHAPTER: Special Programs - 12
SECTION: Land and Agrarian Reform Fund - 1

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1 - Financing for the acquisition of rural property with existing improvements, supported by resources from the Land and Agrarian Reform Fund, shall be subject to the following conditions:

a) credit limit: up to R$40,000.00 (forty thousand reais) per beneficiary, covering up to 100% (one hundred percent) of the value of the items subject to financing, provided that the approval of the operation is conditioned upon the presentation of a financing proposal demonstrating the technical and economic-financial viability of the rural activity to be explored and, in the case of the financing referred to in item I of letter "a" of item 2, the necessity of the investments;

b) terms, established based on the payment capacity to be generated by the enterprise:

I - for financing up to R$15,000.00 (fifteen thousand reais), up to 14 (fourteen) years, including up to 24 (twenty-four) months of grace period;

II - for financing amounts above R$15,000.00 (fifteen thousand reais), up to 17 (seventeen) years, including up to 24 (twenty-four) months of grace period;

c) guarantee: mortgage or fiduciary alienation of the financed property, and in the case of financing to associations or cooperatives, fiduciary guarantee from the beneficiary members or partners of the fund must be required cumulatively;

d) financial charges: applicable based on the amount financed per beneficiary, the following effective interest rates:

I - up to R$5,000.00 (five thousand reais): 3% p.a. (three percent per year);

II - above R$5,000.00 (five thousand reais) and up to R$15,000.00 (fifteen thousand reais): 4% p.a. (four percent per year);

III - above R$15,000.00 (fifteen thousand reais) and up to R$25,000.00 (twenty-five thousand reais): 5.5% p.a. (five and five-tenths percent per year);

IV - above R$25,000.00 (twenty-five thousand reais): 6.5% p.a. (six and five-tenths percent per year);

e) benefits: conditioned on the execution of actions provided in the respective financing proposals, guidelines, norms, and methods of proof to be established in the operational regulation, according to the table below:

I - fixed compliance bonus, based on the region where the financed property is located, applicable to the total of financial charges and principal of each installment, exclusively when payments are made by their respective due dates;

II - additional compliance bonus of up to 10% (ten percent), for financing granted in the Northeast Region and the area of the Northeast Development Agency (Adene) in the States of Minas Gerais (MG) and Espírito Santo (ES), and up to 5% (five percent), for financing in other regions, granted on the financial charges and principal of each installment regarding the value of the property acquisition, when this is effected at a value lower than the reference value established for each case, communicated to the financial agent by the State or Regional Technical Unit, as defined in the operational regulation of the fund;

Region where the financed property is located	Fixed Bonus	Additional Compliance Bonus up to
Semi-arid Northeast Region and Adene area in the States of Minas Gerais (MG) and Espírito Santo (ES)	40%	10%
Rest of the Northeast Region	30%	10%
Central-West, North, and Southeast Regions, except São Paulo	18%	5%
South Region and São Paulo	15%	5%

f) remuneration of the financial agent: for financing granted based on Resolution 3176 of March 8, 2004, a fixed rate of 0.7% p.a. (seven-tenths percent per year) on the outstanding balance, plus 3% (three percent) on payments made by borrowers.

2 - With regard to the provisions in the previous item, the following must be observed:

a) the financing referred to in letter "a" also includes the following items:

I - basic investments for the initial structuring of productive units of acquired properties, thus considered investments in basic infrastructure, such as construction or renovation of residence, provision of water for human and animal consumption, electrification network, opening or recovery of internal access roads and construction or renovation of fences, as well as family maintenance during the first 6 (six) months of the project and investments for the initial implementation of the rural activity to be explored, including up to R$720.00 (seven hundred and twenty reais) for the hiring of technical assistance for the implementation and monitoring of the execution of the financing project, as established in the operational regulation of the fund;

II - other costs, thus considered taxes, fees, and notarial expenses of the transaction and registration of the acquired rural property, as well as topographic expenses related to the demarcation of plots;

b) the value of financing intended for basic investments referred to in item I of the previous letter may not exceed, per beneficiary, 50% (fifty percent) of the total value of the financing or R$9,000.00 (nine thousand reais), whichever is lower;

c) the value of each amortization installment must be obtained by dividing the outstanding balance by the number of remaining installments, except as provided in the following letter;

d) in financing up to R$15,000.00 (fifteen thousand reais) in the first payment, after the grace period, the borrower pays only the interest corresponding to the first 12 (twelve) months of the financing;

e) the sum of the compliance bonuses referred to in letter "e" has a ceiling of R$1,000.00 (one thousand reais) per annual amortization installment of the financing;

f) in the event of early payment of an installment, after the eighth year of the contract's effectiveness, the managing body of the fund shall grant, in the manner established in the operational regulation, discounts of up to 9% p.a. (nine percent per year) on the installment, calculated pro-rata for the period of early payment;

g) credit instruments must contain a clause establishing that financial charges may be reviewed annually by the National Monetary Council, up to a limit of 12% p.a. (twelve percent per year);

h) the remuneration of the financial agent may be periodically reassessed based on compliance indices and the volume of resources made available for application in the program.

3 - When the financing of the basic investments provided for in item I of letter "a" of the previous item is replaced by financing of subprojects of community investments, including the component intended for youth, as defined in the Land Credit and Rural Poverty Combat Project, object of Loan Agreement 7037-BR, approved by Resolution 5 of May 15, 2001, of the Federal Senate, the limits and financing conditions provided for in the Project Operations Manual must be observed.