7 U.S.C. § 1942 | Purposes of loans

(a)

In general

A direct loan (including a microloan, as defined by the Secretary) may be made under this subchapter only for—

(1)

paying the costs incident to reorganizing a farm or ranch for more profitable operation;

(2)

purchasing livestock, poultry, or farm or ranch equipment;

(3)

purchasing feed, seed, fertilizer, insecticide, or farm or ranch supplies, or to meet other essential farm or ranch operating expenses, including cash rent;

(4)

financing land or water development, use, or conservation;

(5)

paying loan closing costs;

(6)

section 655 of title 29 section 667 of title 29 assisting a farmer or rancher in changing the equipment, facilities, or methods of operation of a farm or ranch to comply with a standard promulgated under or a standard adopted by a State under a plan approved under , if the Secretary determines that without assistance under this paragraph the farmer or rancher is likely to suffer substantial economic injury in complying with the standard;

(7)

section 1934 of this title training a limited-resource borrower receiving a loan under in maintaining records of farming and ranching operations;

(8)

section 2006a of this title training a borrower under ;

(9)

refinancing the indebtedness of a borrower, if the borrower—

(A)

has refinanced a loan under this subchapter not more than 4 times previously; and

(B)

(i)

42 U.S.C. 5121 is a direct loan borrower under this chapter at the time of the refinancing and has suffered a qualifying loss because of a natural disaster declared by the Secretary under this chapter or a major disaster or emergency designated by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( et seq.); or

(ii)

is refinancing a debt obtained from a creditor other than the Secretary; or

(10)

providing other farm, ranch, or home needs, including family subsistence.

(b)

Guaranteed loans

A loan may be guaranteed under this subchapter only for—

(1)

paying the costs incident to reorganizing a farm or ranch for more profitable operation;

(2)

purchasing livestock, poultry, or farm or ranch equipment;

(3)

purchasing feed, seed, fertilizer, insecticide, or farm or ranch supplies, or to meet other essential farm or ranch operating expenses, including cash rent;

(4)

financing land or water development, use, or conservation;

(5)

refinancing indebtedness;

(6)

paying loan closing costs;

(7)

(8)

section 2006a of this title training a borrower under ; or

(9)

providing other farm, ranch, or home needs, including family subsistence.

(c)

Hazard insurance requirement

(1)

In general

After the Secretary makes the determination required by paragraph (2), the Secretary may not make a loan to a farmer or rancher under this subchapter unless the farmer or rancher has, or agrees to obtain, hazard insurance on the property to be acquired with the loan.

(2)

Determination

April 4, 1996Not later than 180 days after , the Secretary shall determine the appropriate level of insurance to be required by paragraph (1).

(d)

Private reserve

(1)

In general

Notwithstanding any other provision of this chapter, the Secretary may reserve a portion of any loan made under this subchapter to be placed in an unsupervised bank account that may be used at the discretion of the borrower for the basic family needs of the borrower and the immediate family of the borrower.

(2)

Limit on size of the reserve

The size of the reserve shall not exceed the least of—

(A)

10 percent of the loan;

(B)

$5,000; or

(C)

the amount needed to provide for the basic family needs of the borrower and the borrower’s immediate family for 3 calendar months.

(e)

Valuation of local or regional crops

(1)

In general

The Secretary shall develop ways to determine unit prices (or other appropriate forms of valuation) for crops and other agricultural products, the end use of which is intended to be in locally or regionally produced agricultural food products, to facilitate lending to local and regional food producers.

(2)

Price history

The Secretary shall implement a mechanism for local and regional food producers to establish price history for the crops and other agricultural products produced by local and regional food producers.

Pub. L. 87–128, title III, § 312Aug. 8, 196175 Stat. 310 Pub. L. 87–703, title IV, § 401(4)Sept. 27, 196276 Stat. 632 Pub. L. 90–488, § 8Aug. 15, 196882 Stat. 771 Pub. L. 92–419, title IAug. 30, 197286 Stat. 665 Pub. L. 95–113, title XIV, § 1448(b)Sept. 29, 197791 Stat. 1012 Pub. L. 95–334, title I, § 115Aug. 4, 197892 Stat. 425 Pub. L. 96–438, § 1(3)Oct. 13, 198094 Stat. 1871 Pub. L. 99–198, title XIIIDec. 23, 198599 Stat. 1521 Pub. L. 101–624, title XVIII, § 1818(b)Nov. 28, 1990104 Stat. 3830 Pub. L. 102–237, title V, § 501(b)Dec. 13, 1991105 Stat. 1866 Pub. L. 102–552, title V, § 516(f)(1)(A)Oct. 28, 1992106 Stat. 4137 Pub. L. 104–127, title VI, § 612(a)Apr. 4, 1996110 Stat. 1087 Pub. L. 113–79, title VFeb. 7, 2014128 Stat. 836(, , ; , , ; , , ; , §§ 120(b), 121, , ; , , ; , , ; , , ; , §§ 1306, 1307, , ; , , ; , , ; , (2), , , 4138; , , ; , §§ 5105, 5106(b)(2), , , 838.)

Editorial Notes

References in Text

Pub. L. 87–128Aug. 8, 196175 Stat. 307 section 1921 of this titleThis chapter, referred to in subsecs. (a)(9)(B)(i) and (d)(1), was in the original “this title”, meaning title III of , , , known as the Consolidated Farm and Rural Development Act, which is classified principally to this chapter. For complete classification of title III to the Code, see Short Title note set out under and Tables.

Pub. L. 93–288May 22, 197488 Stat. 143 section 5121 of Title 42The Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (a)(9)(B)(i), is , , , which is classified principally to chapter 68 (§ 5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

Amendments

Pub. L. 113–79, § 5106(b)(2)2014—Subsec. (a). , inserted “(including a microloan, as defined by the Secretary)” after “A direct loan” in introductory provisions.

Pub. L. 113–79, § 5105Subsec. (e). , added subsec. (e).

Pub. L. 104–1271996— amended section generally, substituting present provisions for provisions outlining purposes of loans made under this subchapter, authorizing loans to rural area residents to operate small business enterprises, authorizing loans for pollution abatement and control projects in rural areas and providing for limitations on such loans, and authorizing creation, from loan funds, of nonsupervised bank accounts to be used at discretion of borrower for necessary family living expenses.

Pub. L. 102–552, § 516(f)(2)Pub. L. 102–237, § 501(b)1992—Subsec. (a). , repealed amendment by . See 1991 Amendment note below.

Pub. L. 102–552, § 516(f)(1)(A)Pub. L. 101–624, § 1818(b), made technical correction to directory language of . See 1990 Amendment note below.

Pub. L. 102–237, § 501(b)42 U.S.C. 5901 section 1934 of this title section 2006a of this title Pub. L. 102–552, § 516(f)(2)1991—Subsec. (a). , which directed the substitution of “systems (for purposes of this subchapter, the term ‘solar energy’ means energy derived from sources (other than fossil fuels) and technologies included in the Federal Nonnuclear Energy Research and Development Act of 1974) ( et seq.), (12) training in maintaining records of farming and ranching operations for limited resource borrowers receiving loans under , and (13) borrower training under .” for “ ‘systems.’ and all that follows”, could not be executed because “systems.” does not appear in subsec. (a) was repealed by . See Construction of 1991 Amendment note below.

Pub. L. 101–624, § 1818(b)Pub. L. 102–552, § 516(f)(1)(A)1990—Subsec. (a). , as amended by , added cl. (13).

Pub. L. 99–198, § 13061985—Subsec. (a). , added cl. (12).

Pub. L. 99–198, § 1307Subsec. (e). , added subsec. (e).

Pub. L. 96–4381980—Subsec. (a). added cl. (11).

Pub. L. 95–3341978—Subsec. (a). , struck out “individual” after “title, to”.

Pub. L. 95–1131977—Subsec. (a). inserted parenthetical provision extending the section to include farm equipment which utilizes solar energy and inserted definition of “solar energy”.

Pub. L. 92–4191972—Subsec. (a). , §§ 120(b), 121(1), (2), substituted “section 1941(a) for “section 1941”, designated existing provisions as subsec. (a), and added cl. (10).

Pub. L. 92–419, § 121(3)Subsecs. (b) to (d). , added subsecs. (b) to (d).

Pub. L. 90–4881968— struck out from cl. (4) the concluding phrase, “including recreational uses and facilities”, added cls. (5) and (6), and redesignated former cls. (5) to (7) as (7) to (9), respectively.

Pub. L. 87–7031962— authorized, in cl. (4), loans to be made for recreational uses and facilities.

Statutory Notes and Related Subsidiaries

Effective Date of 1996 Amendment

Pub. L. 104–127, title VI, § 612(b)Apr. 4, 1996110 Stat. 1089

7 U.S.C. 1942(c)(1)“Section 312(c)(1) of the Consolidated Farm and Rural Development Act [] shall not apply until the Secretary of Agriculture makes the determination required by section 312(c)(2) of the Act.”

Mar. 3, 1997Mar. 24, 1997, , , provided that: [The Secretary’s determination relating to hazard insurance under this provision was contained in interim rules published , and effective , see 62 F.R. 9351.]

Pub. L. 104–127Apr. 4, 1996section 663(b) of Pub. L. 104–127 section 1922 of this titleAmendment by effective 90 days after , see , set out as a note under .

Effective Date of 1992 Amendment

Pub. L. 102–552, title V, § 516(f)(1)(B)Oct. 28, 1992106 Stat. 4137

Pub. L. 101–624“The amendment made by subparagraph (A) [amending this section] shall take effect as if included in the Food, Agriculture, Conservation, and Trade Act of 1990 [] at the time such Act became law.”

, , , provided that:

Effective Date of 1977 Amendment

Pub. L. 95–113Oct. 1, 1977section 1901 of Pub. L. 95–113 section 1307 of this titleAmendment by effective , see , set out as a note under .

Transfer of Functions

section 2302(b) of Pub. L. 101–624Powers, duties, and assets of agencies, offices, and other entities within Department of Agriculture relating to rural development functions transferred to Rural Development Administration by .

Construction of 1991 Amendment

Pub. L. 102–552, title V, § 516(f)(2)Oct. 28, 1992106 Stat. 4138

Public Law 102–237 105 Stat. 1866 7 U.S.C. 1921“Subsection (b) of section 501 of the Food, Agriculture, Conservation, and Trade Act Amendments of 1991 (; ) [amending this section] is repealed. The Consolidated Farm and Rural Development Act ( et seq.) shall be applied and administered as if such subsection had never become law.”

, , , provided that: