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Category: Real Estate Law
Satisfied Customers: 24869
Experience:  20 years extensive experience in real estate law, foreclosure, finance, and landlord tenant law.
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I have a real estate loan in Georgia on a large number of agricultural

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I have a real estate loan in Georgia on a large number of agricultural acres which was taken out in 2009. I am refinancing the current loan (which is with a national bank in the United States). There is a substantial prepayment penalty. Is the prepayment penalty binding in Georgia? What about federal guidelines on real estate lending and prepayment penalties?
Hello, and welcome! I am a licensed attorney and will be happy to assist you.

This isn't a residential loan - but an agricultural or commercial loan - correct?
Customer: replied 3 years ago.

Correct. It is an agricultural land loan. There is a house on the property.

I'm going to double check - but I don't think that it's illegal to charge a prepayment penality on an agricultural loan.
Customer: replied 3 years ago.

I know that in Georgia it is legal to charge a prepayment penalty if it is spelled out in the contract. I was hoping federal law would differ.

No. To the contrary, federal law specifically allows it. I was double checking on Georgia law specifically.

Even the SBA has as part of their loans a prepayment penalty under certain circumstances.
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