Under what condition will normal income security proceeds be released for essential owner withdrawals and farm operating expenses?

The correct answer is that normal income security proceeds will be released for essential owner withdrawals and farm operating expenses when the loan is accelerated. When a loan is accelerated, it means that the lender has declared the full amount of the loan due and payable because of a default or other specified conditions in the loan agreement. This situation often signifies that the borrower is in financial distress. In such cases, the lender may allow the release of certain funds from normal income security to cover necessary operating expenses or withdrawals, as it helps ensure that the farm can continue to function operationally during a critical time. This approach aims to stabilize the situation temporarily while addressing the underlying issues.

The other options involve circumstances that do not directly relate to the immediate release of income security proceeds for essential needs. For instance, sending primary loan servicing notices relates to notifying borrowers of their servicing options and does not indicate a release of funds. Concluding appeals may happen after a default but does not address operational needs. Developing a new plan might be a proactive step, but it doesn’t automatically trigger the release of funds either. Thus, the context of loan acceleration as a condition for accessing income security proceeds is essential for understanding this aspect of farm loan management.