7 USC 1964 - Terms of loans

United States Code

USC most recently checked for updates: Sep 22, 2023

§ 1963. Purpose and extent of loans

§ 1965. Repealed.

U.S. Code
Notes

§ 1964.

Terms of loans

(a)

Maximum amount of loan

The Secretary may not make a loan under this subchapter 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 subchapter to exceed $500,000.

(b)

Interest rates

Loans under this subchapter 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 8 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 subchapter, 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

(2)

No basis for denial of loan

(A)

In general

Subject to subparagraph (B), the Secretary shall not deny a loan under this subchapter 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 subchapter 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 shall be eligible for a grant under this chapter during any period in which the Community Emergency Drought Relief Act of 1977 is or has been in effect.

(Pub. L. 87–128, title III, § 324, Aug. 8, 1961, 75 Stat. 311; Pub. L. 93–24, § 4, Apr. 20, 1973, 87 Stat. 25; Pub. L. 94–68, § 5, Aug. 5, 1975, 89 Stat. 381; Pub. L. 95–89, title IV, § 406, Aug. 4, 1977, 91 Stat. 561; Pub. L. 95–334, title I, § 119, Aug. 4, 1978, 92 Stat. 427; Pub. L. 96–302, title I, § 120(b), July 2, 1980, 94 Stat. 841; Pub. L. 96–438, § 3(a), (b)(1), Oct. 13, 1980, 94 Stat. 1872, 1873; Pub. L. 97–35, title I, § 162(a), Aug. 13, 1981, 95 Stat. 378; Pub. L. 98–258, title VI, § 602(b), Apr. 10, 1984, 98 Stat. 138; Pub. L. 99–198, title XIII, § 1308(b)(3), (c), Dec. 23, 1985, 99 Stat. 1523; Pub. L. 100–707, title I, § 109(c)(2), Nov. 23, 1988, 102 Stat. 4708; Pub. L. 104–127, title VI, §§ 624, 625, Apr. 4, 1996, 110 Stat. 1091; Pub. L. 105–277, div. A, § 101(a) [title VIII, § 802], Oct. 21, 1998, 112 Stat. 2681, 2681–38.)

cite as: 7 USC 1964