7 U.S.C. § 1983 | Special conditions and limitations on loans

In connection with loans made or insured under this chapter, the Secretary shall—

(1)

require the applicant (A) to certify in writing, and the Secretary shall determine, that he is unable to obtain sufficient credit elsewhere to finance his actual needs at reasonable rates and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near which the applicant resides for loans for similar purposes and periods of time, and (B) to furnish an appropriate written financial statement;

(2)

except with respect to a loan under section 1926, 1932, or 1944 of this title, require—

(A)

an annual review of the credit history and business operation of the borrower; and

(B)

an annual review of the continued eligibility of the borrower for the loan;

(3)

section 1934 of this title section 1922 of this title except for guaranteed loans, require an agreement by the borrower that if at any time it shall appear to the Secretary that the borrower may be able to obtain a loan from a production credit association, a Federal land bank, or other responsible cooperative or private credit source (or, in the case of a borrower under , the borrower may be able to obtain a loan under ), at reasonable rates and terms for loans for similar purposes and periods of time, the borrower will, upon request by the Secretary, apply for and accept such loan in sufficient amount to repay the Secretary or the insured lender, or both, and to pay for any stock necessary to be purchased in a cooperative lending agency in connection with such loan;

(4)

require such provision for supervision of the borrower’s operations as the Secretary shall deem necessary to achieve the objectives of the loan and protect the interests of the United States;

(5)

section 101(12) of title 38 require the application of a person who is a veteran of any war, as defined in , for a loan under subchapter I or II to be given preference over a similar application from a person who is not a veteran of any war, if the applications are on file in a county or area office at the same time;

(6)

section 1926 of this title in the case of water and waste disposal direct and guaranteed loans provided under , encourage, to the maximum extent practicable, private or cooperative lenders to finance rural water and waste disposal facilities by—

(A)

maximizing the use of loan guarantees to finance eligible projects in rural communities in which the population exceeds 5,500;

(B)

maximizing the use of direct loans to finance eligible projects in rural communities if the impact on ratepayers will be material when compared to financing with a loan guarantee;

(C)

establishing and applying a materiality standard when determining the difference in impact on ratepayers between a direct loan and a loan guarantee;

(D)

in the case of projects that require interim financing in excess of $500,000, requiring that the projects initially seek the financing from private or cooperative lenders; and

(E)

determining if an existing direct loan borrower can refinance with a private or cooperative lender, including with a loan guarantee, prior to providing a new direct loan; and

(7)

section 1926(a) of this title in the case of an insured or guaranteed loan issued or modified under , charge and collect from the lender fees in such amounts as to bring down the costs of subsidies for the insured or guaranteed loan, except that the fees shall not act as a bar to participation in the programs nor be inconsistent with current practices in the marketplace.

Pub. L. 87–128, title III, § 333Aug. 8, 196175 Stat. 314 Pub. L. 90–488, § 12Aug. 15, 196882 Stat. 771 Pub. L. 91–620, § 3Dec. 31, 197084 Stat. 1862 Pub. L. 92–419, title IAug. 30, 197286 Stat. 664 Pub. L. 95–334, title I, § 123Aug. 4, 197892 Stat. 428 Pub. L. 96–438, § 3(c)Oct. 13, 198094 Stat. 1875 Pub. L. 97–98, title XVI, § 1604Dec. 22, 198195 Stat. 1346 Pub. L. 101–624, title XVIII, § 1810Nov. 28, 1990104 Stat. 3820 Pub. L. 102–237, title V, § 501(e)Dec. 13, 1991105 Stat. 1867 Pub. L. 102–554, § 12Oct. 28, 1992106 Stat. 4151 Pub. L. 103–354, title II, § 227(b)(2)Oct. 13, 1994108 Stat. 3218 Pub. L. 104–127, title VIApr. 4, 1996110 Stat. 1093 Pub. L. 107–171, title V, § 5306May 13, 2002116 Stat. 345 Pub. L. 113–79, title VI, § 6019Feb. 7, 2014128 Stat. 846 Pub. L. 115–334, title VI, § 6418Dec. 20, 2018132 Stat. 4764(, , ; , , ; , , ; , §§ 118(b), 125, 126, , , 666; , , ; , , ; , , ; , title XXIII, § 2388(e), , , 4053; , , ; , , ; , , ; , §§ 634, 635(a), 636, , ; , , ; , , ; , , .)

Editorial Notes

References in Text

Pub. L. 87–128Aug. 8, 196175 Stat. 307 section 1921 of this titleThis chapter, referred to in text, 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.

Amendments

Pub. L. 115–3342018—Par. (7). added par. (7).

Pub. L. 113–79, § 6019(1)2014—, struck out “require” after “shall” in introductory provisions.

Pub. L. 113–79, § 6019(2)Par. (1). , inserted “require” after “(1)”.

Pub. L. 113–79, § 6019(3)Par. (2). , inserted “, require” after “1944 of this title”.

Pub. L. 113–79, § 6019(4)Par. (3). , inserted “require” after “loans,”.

Pub. L. 113–79, § 6019(5)(A)Par. (4). , inserted “require” after “(4)”.

Pub. L. 113–79, § 6019(6)(A)Par. (5). , inserted “require” after “(5)”.

Pub. L. 113–79, § 6019(5)(B)Par. (6). , (6)(B), (7), added par. (6).

Pub. L. 107–171 section 590h(b)(5)(B) of title 162002—Par. (2). amended par. (2) generally. Prior to amendment, par. (2) read as follows: “except with respect to a loan under section 1926, 1932, or 1944 of this title, the county or area committee established under to certify in writing—

“(A) that an annual review of the credit history and business operation of the borrower has been conducted; and

“(B) that a review of the continued eligibility of the borrower for the loan has been conducted;”.

Pub. L. 104–127, § 6341996—Par. (1)(B). , substituted “an appropriate written financial statement” for “a written statement showing the applicant’s net worth”.

Pub. L. 104–127, § 635(a)Pars. (2) to (4). , added par. (2) and redesignated former pars. (2) and (3) as (3) and (4), respectively. Former par. (4) redesignated (5).

Pub. L. 104–127, § 636Par. (5). , added par. (5) and struck out former par. (5) which read as follows: “the applications of veterans for loans under subchapter I or II of this chapter to be given preference over similar applications of nonveterans on file in any county or area office at the same time. Veterans as used herein shall mean persons who served in the Armed Forces of the United States during any war between the United States and any other nation, during the Korean conflict or the Vietnam era and who were discharged or released therefrom under conditions other than dishonorable.”

Pub. L. 104–127, § 635(a)(1), redesignated par. (4) as (5).

Pub. L. 103–3541994—Pars. (2) to (5). redesignated pars. (3) to (5) as (2) to (4), respectively, and struck out former par. (2) relating to certification by county committee of applicant’s eligibility for loan.

Pub. L. 102–5541992—Par. (2)(A)(iii). substituted “5 years” for “2 years”.

Pub. L. 102–2371991—Par. (2)(A). redesignated cls. (1) to (3) as (i) to (iii), respectively.

Pub. L. 101–624, § 2388(e)1990—, redesignated pars. (a) to (e) as (1) to (5), respectively, and in par. (1) redesignated subpars. (1) and (2) as (A) and (B), respectively; in par. (2) redesignated subpars. (1) and (2) as (A) and (B), respectively, and in subpar. (A) redesignated cls. (A) to (C) as (1) to (3), respectively; in par. (3) made technical amendments to references to sections 1934 and 1922 of this title involving original act and requiring no change in text; and in par. (5) made technical amendments to reference to subchapter I or II of this chapter involving original act and requiring no change in text.

Pub. L. 101–624, § 1810 section 1961(a)(2) of this titleProvided, amended par. (b) generally. Prior to amendment, par. (b) read as follows: “except for loans under sections 1926, 1932, 1944 and 1961(a)(2) of this title, the county committee to certify in writing that the applicant meets the eligibility requirements for the loan, and has the character, industry, and ability to carry out the proposed operations, and will, in the opinion of the committee, honestly endeavor to carry out his undertakings and obligations; and for loans under , the Secretary shall require the recommendation of the county committee as to the making or insuring of the loan: , That the Secretary may provide a procedure for appeal and review of any determination relating to a certification or recommendation required to be made by the county committee, and for reversal or modification thereof should the facts warrant such action;”.

Pub. L. 97–981981—Par. (a). designated existing provisions after “the applicant” as cl. (1), and added cl. (2).

Pub. L. 96–4381980—Par. (b). substituted “section 1961(a)(2)” for “section 1961(b)(2)” in two places.

Pub. L. 95–334, § 123(1)1978—Par. (b). , inserted proviso relating to appeal and review procedure for any determination regarding a certification, etc.

Pub. L. 95–334, § 123(2)section 1934 of this title section 1922 of this titlePar. (c). , (3), inserted provisions excepting guaranteed loans and provisions relating to borrowers under obtaining loans under .

Pub. L. 92–419, § 1251972—Par. (a). , inserted “, and the Secretary shall determine,” after “in writing”.

Pub. L. 92–419 section 1932 of this title section 1961(b)(2) of this titlePar. (b). , §§ 118(b), 126, inserted reference to and substituted “” for “said sections”, respectively.

Pub. L. 91–6201970— included persons who served during the Vietnam era within the definition of “Veterans” in par. (e).

Pub. L. 90–4881968—Par. (b). struck out “farming” from phrase “proposed farming operations”.

Statutory Notes and Related Subsidiaries

Effective Date of 1991 Amendment

Pub. L. 102–237 Pub. L. 101–624 section 1101(b)(3) of Pub. L. 102–237 section 1421 of this titleAmendment by effective as if included in the provision of the Food, Agriculture, Conservation, and Trade Act of 1990, , to which the amendment relates, see , set out as a note under .

Effective Date of 1981 Amendment

Pub. L. 97–98Dec. 22, 1981section 1801 of Pub. L. 97–98 section 4301 of this titleAmendment by effective , see , set out as an Effective Date note under .