In general. Even though a notice of a lien imposed by 26 U.S.C. 6321 is filed in accordance with § 70.148 of this part, the lien is not valid with respect to a security interest which:

Comes into existence after the tax lien filing,

Is on qualified property covered by the terms of a real property construction or improvement financing agreement entered into before the tax lien filing, and

Is protected under local law against a judgment lien arising, as of the time of tax lien filing, out of an unsecured obligation.

Real property construction or improvement financing agreement. For purposes of this section, the term “real property construction or improvement financing agreement” means any written agreement to make cash disbursements (whether or not at the option of the party agreeing to make such disbursements):

To finance the construction, improvement, or demolition of real property if the agreement provides for a security interest in the real property with respect to which the construction, improvement, or demolition has been or is to be made;

To finance a contract to construct or improve, or demolish real property if the agreement provides for a security interest in the proceeds of the contract; or

To finance the raising or harvesting of a farm crop or the raising of livestock or other animals if the agreement provides for a security interest in any property subject to the lien imposed by 26 U.S.C. 6321 at the time of tax lien filing, in the crop raised or harvested, or in the livestock or other animals raised.

Qualified property. For purposes of this section, the term “qualified property” includes only:

In the case of an agreement described in paragraph (b)(1) of this section, the real property with respect to which the construction or improvement has been or is to be made;

In the case of an agreement described in paragraph (b)(2) of this section, the proceeds of the contract to construct or improve real property; or

In the case of an agreement described in paragraph (b)(3) of this section, property subject to the lien imposed by 26 U.S.C. 6321 at the time of tax lien filing, the farm crop raised or harvested, or the livestock or other animals raised.