Header:
UNITED STATES CODE SERVICE
TITLE 7. AGRICULTURE
CHAPTER 50. AGRICULTURAL CREDIT
EMERGENCY LOANS
Date:
01/17/2012
Document:
§ 1964. Terms of loans
(a) Maximum amount of loan. The Secretary may not make a loan under this subtitle [7 USCS §§ 1961 et seq.] to a borrower who has suffered a loss in an amount that--
(1) exceeds the actual loss caused by a disaster; or
(2) would cause the total indebtedness of the borrower under this subtitle [7 USCS §§ 1961 et seq.] to exceed $ 500,000.
(b) Interest rates. Loans under this subtitle [7 USCS §§ 1961 et seq.] shall be at rates of interest as follows:
(1) For loans or portions of loans up to the amount of the applicant's actual loss caused by the disaster, as limited under subsection (a)(1) of this section, the interest shall be at rates prescribed by the Secretary, but not in excess of 3 percent per annum; and
(2) For loans or portions of loans in excess of the amount of the applicant's actual loss caused by the disaster, as limited under subsection (a)(1) of this section, (A) the interest for insured loans shall be at rates prevailing in the private market for similar loans, as determined by the Secretary, and (B) the interest for guaranteed loans shall be at rates agreed on by the borrower and lender, but not in excess of such rates as may be determined by the Secretary.
(c) Interest subsidies. For guaranteed loans under this subtitle [7 USCS §§ 1961 et seq.], the Secretary may pay interest subsidies to the lenders for those portions of the loans up to the amount of the actual loss caused by the disaster, as limited under subsection (a)(1) of this section. Any such subsidy shall not exceed the difference between the interest rate being charged for loans up to the amount of the actual loss, as established under subsection (b)(1) of this section, and the maximum interest rate for guaranteed loans, as established under subsection (b)(2) of this section.
(d) Repayment.
(1) In general. All loans under this subtitle [7 USCS §§ 1961 et seq.] shall be repayable at such times as the Secretary may determine, taking into account the purposes of the loan and the nature and effect of the disaster, but not later than as provided for loans for similar purposes under subtitles A and B of this title [7 USCS §§ 1922 et seq., 1941 et seq.], and upon the full personal liability of the borrower and upon the best security available, as the Secretary may prescribe: Provided, That the security is adequate to assure repayment of the loans, except that if such security is not available because of the disaster, the Secretary shall (1) accept as security such collateral as is available, a portion or all of which may have depreciated in value due to the disaster and which in the opinion of the Secretary, together with the Secretary's confidence in the repayment ability of the applicant, is adequate security for the loan, and (2) make such loan repayable at such times as the Secretary may determine, not later than as provided under subtitles A and B of this title [7 USCS §§ 1922 et seq., 1941 et seq.], as justified by the needs of the applicant: Provided further, That for any disaster occurring after January 1, 1975, the Secretary, if the loan is for a purpose described in subtitle B of this title [7 USCS §§ 1941 et seq.], may make the loan repayable at the end of a period of more than seven years, but not more than twenty years, if the Secretary determines that the need of the loan applicant justifies such a longer repayment period: Provided further, That for any direct or insured loan (other than a guaranteed loan) approved under section 321(b) of this title [7 USCS § 1961(b)], three years after the loan is made or insured, and every two years thereafter for the term of the loan, the Secretary shall review the loan; and if, based on such review, the Secretary determines that the borrower is able to obtain a loan from non-Federal sources at reasonable rates and terms for loans for similar purposes and periods of time, the borrower shall on request by the Secretary, apply for and accept such non-Federal loan in sufficient amount to repay the Secretary. If farm assets (including land, livestock, and equipment) are used as collateral to secure a loan made under this subtitle [7 USCS §§ 1961 et seq.], the Secretary shall establish the value of the assets as of the day before the occurrence of the natural disaster, major disaster, or emergency that is the basis for a request for assistance under this subtitle [7 USCS §§ 1961 et seq.] or the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).
(2) No basis for denial of loan.
(A) In general. Subject to subparagraph (B), the Secretary shall not deny a loan under this subtitle [7 USCS §§ 1961 et seq.] to a borrower by reason of the fact that the borrower lacks a particular amount of collateral for the loan if the Secretary is reasonably certain that the borrower will be able to repay the loan.
(B) Refusal to pledge available collateral. The Secretary may deny or cancel a loan under this subtitle [7 USCS §§ 1961 et seq.] if a borrower refuses to pledge available collateral on request by the Secretary.
(e) Grant eligibility. Any political subdivision of a State with a population of less than ten thousand inhabitants that, if such subdivision had a population of ten thousand or more inhabitants, would be eligible for a grant under the first title of the Community Emergency Drought Relief Act of 1977 [42 USCS § 5184 note] shall be eligible for a grant under the Consolidated Farm and Rural Development Act during any period in which the Community Emergency Drought Relief Act of 1977 [42 USCS §§ 3121 note, 5184 note] is or has been in effect.
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