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17.5 INSURANCE PROCEEDS [7 CFR 3555.252]
When insurance funds remain after payments for all repairs, replacements, and other authorized disbursements have been made and the repairs have been inspected in accordance with Agency construction requirements noted in Chapter 12 of this Handbook, the funds must be applied in the following order:
1. Prior liens (including past-due property taxes);
2. Past-due amounts (requires written consent from borrower);
3. Protective advances; and
4. Released to the borrower if the servicer’s debt is adequately secured.
SECTION 2: BORROWER ACTIONS REQUIRING SERVICER OR AGENCY APPROVAL