1. U.S. Code
  2. title 7
  3. chapter 50
  4. subchapter I
  5. § 1922

Collapse to view only § 1922. Persons eligible for real estate loans

§ 1922. Persons eligible for real estate loans
(a) In general
(1) Eligibility requirements
(2) Special rules
(A) Eligibility of certain operating-only entities
(B) Eligibility of certain embedded entities
(b) Direct loans
(1) In generalSubject to paragraph (3), the Secretary may make a direct loan under this subchapter only to a farmer or rancher who has participated in the business operations of a farm or ranch for not less than 3 years or has other acceptable experience for a period of time, as determined by the Secretary, and—
(A) is a qualified beginning farmer or rancher;
(B) has not received a previous direct farm ownership loan made under this subchapter; or
(C) has not received a direct farm ownership loan under this subchapter more than 10 years before the date the new loan would be made.
(2) Youth loans
(3) Transition rule
(A) In general
(B) Less than 5 years
(C) 5 years or more
(D) Notice
(4) Waiver authorityIn the case of a qualified beginning farmer or rancher, the Secretary may—
(A) reduce the 3-year requirement in paragraph (1) to 1 or 2 years, if the farmer or rancher has—
(i) not less than 16 credit hours of post-secondary education in a field related to agriculture;
(ii) successfully completed a farm management curriculum offered by a cooperative extension service, a community college, an adult vocational agriculture program, a nonprofit organization, or a land-grant college or university;
(iii) at least 1 year of experience as hired farm labor with substantial management responsibilities;
(iv) successfully completed a farm mentorship, apprenticeship, or internship program with an emphasis on management requirements and day-to-day farm management decisions;
(v) significant business management experience;
(vi) been honorably discharged from the armed forces of the United States;
(vii) successfully repaid a youth loan made under section 1941(b) of this title; or
(viii) an established relationship with an individual who has experience in farming or ranching, or is a retired farmer or rancher, and is participating as a counselor in a Service Corps of Retired Executives program authorized under section 637(b)(1)(B) of title 15, or with a local farm or ranch operator or organization, approved by the Secretary, that is committed to mentoring the farmer or rancher; or
(B) waive the 3-year requirement in paragraph (1) if the farmer or rancher meets the requirements of clauses (iii) and (viii) of subparagraph (A).
(Pub. L. 87–128, title III, § 302, Aug. 8, 1961, 75 Stat. 307; Pub. L. 91–620, § 2, Dec. 31, 1970, 84 Stat. 1862; Pub. L. 95–334, title I, § 101, Aug. 4, 1978, 92 Stat. 420; Pub. L. 97–98, title XVI, § 1601(a), Dec. 22, 1981, 95 Stat. 1346; Pub. L. 99–198, title XIII, §§ 1301(a), 1302(a), 1303, Dec. 23, 1985, 99 Stat. 1518, 1519; Pub. L. 104–127, title VI, § 601, Apr. 4, 1996, 110 Stat. 1084; Pub. L. 105–277, div. A, § 101(a) [title VIII, §§ 804, 805(1)], Oct. 21, 1998, 112 Stat. 2681, 2681–39; Pub. L. 107–171, title V, §§ 5001, 5302(a), May 13, 2002, 116 Stat. 341, 344; Pub. L. 110–234, title V, § 5001, May 22, 2008, 122 Stat. 1142; Pub. L. 110–246, § 4(a), title V, § 5001, June 18, 2008, 122 Stat. 1664, 1903; Pub. L. 113–79, title V, § 5001(a), (b), Feb. 7, 2014, 128 Stat. 832, 833; Pub. L. 115–334, title V, § 5101, Dec. 20, 2018, 132 Stat. 4668.)

CITE AS: 7 USC 1922

§ 1923. Purposes of loans
(a) Allowed purposes
(1) Direct loansA farmer or rancher may use a direct loan made under this subchapter only for—
(A) acquiring or enlarging a farm or ranch;
(B) making capital improvements to a farm or ranch;
(C) paying loan closing costs related to acquiring, enlarging, or improving a farm or ranch;
(D) paying for activities to promote soil and water conservation and protection described in section 1924 of this title on a farm or ranch; or
(E) refinancing a temporary bridge loan made by a commercial or cooperative lender to a farmer or rancher for the acquisition of land for a farm or ranch, if—
(i) the Secretary approved an application for a direct farm ownership loan to the farmer or rancher for acquisition of the land; and
(ii) funds for direct farm ownership loans under section 1994(b) of this title were not available at the time at which the application was approved.
(2) Guaranteed loansA farmer or rancher may use a loan guaranteed under this subchapter only for—
(A) acquiring or enlarging a farm or ranch;
(B) making capital improvements to a farm or ranch;
(C) paying loan closing costs related to acquiring, enlarging, or improving a farm or ranch;
(D) paying for activities to promote soil and water conservation and protection described in section 1924 of this title on a farm or ranch; or
(E) refinancing indebtedness.
(b) PreferencesIn making or guaranteeing a loan under this subchapter for purchase of a farm or ranch, the Secretary shall give preference to a person who—
(1) has a dependent family;
(2) to the extent practicable, is able to make an initial down payment on the farm or ranch; or
(3) is an owner of livestock or farm or ranch equipment that is necessary to successfully carry out farming or ranching operations.
(c) Hazard insurance requirement
(1) In general
(2) Determination
(Pub. L. 87–128, title III, § 303, Aug. 8, 1961, 75 Stat. 307; Pub. L. 87–703, title IV, § 401(1), Sept. 27, 1962, 76 Stat. 631; Pub. L. 90–488, § 1, Aug. 15, 1968, 82 Stat. 770; Pub. L. 95–113, title XIV, § 1448(a), Sept. 29, 1977, 91 Stat. 1011; Pub. L. 96–438, § 1(1), Oct. 13, 1980, 94 Stat. 1871; Pub. L. 97–98, title XVI, § 1602, Dec. 22, 1981, 95 Stat. 1346; Pub. L. 104–127, title VI, § 602(a), Apr. 4, 1996, 110 Stat. 1085; Pub. L. 107–171, title V, § 5002, May 13, 2002, 116 Stat. 341.)

CITE AS: 7 USC 1923

§ 1924. Conservation loan and loan guarantee program
(a) In general
(b) Definitions
In this section:
(1) Qualified conservation loan
(2) Qualified conservation project
(3) Conservation plan
The term “conservation plan” means a plan, approved by the Secretary, that, for a farming or ranching operation, identifies the conservation activities that will be addressed with loan funds provided under this section, including—
(A) the installation of conservation structures to address soil, water, and related resources;
(B) the establishment of forest cover for sustained yield timber management, erosion control, or shelter belt purposes;
(C) the installation of water conservation measures;
(D) the installation of waste management systems;
(E) the establishment or improvement of permanent pasture;
(F) compliance with section 3812 of title 16; and
(G) other purposes consistent with the plan, including the adoption of any other emerging or existing conservation practices, techniques, or technologies approved by the Secretary.
(c) Eligibility
(1) In general
(2) Requirements
(d) Priority
In making or guaranteeing loans under this section, the Secretary shall give priority to—
(1) qualified beginning farmers or ranchers and socially disadvantaged farmers or ranchers;
(2) owners or tenants who use the loans to convert to sustainable or organic agricultural production systems; and
(3) producers who use the loans to build conservation structures or establish conservation practices to comply with section 3812 of title 16.
(e) Limitations applicable to loan guarantees
The portion of a loan that the Secretary may guarantee under this section shall be—
(1) 80 percent of the principal amount of the loan; or
(2) in the case of a producer that is a qualified socially disadvantaged farmer or rancher or a beginning farmer or rancher, 90 percent of the principal amount of the loan.
(f) Administrative provisions
(g) Credit eligibility
(h) Authorization of appropriations
(Pub. L. 87–128, title III, § 304, Aug. 8, 1961, 75 Stat. 308; Pub. L. 90–488, § 2, Aug. 15, 1968, 82 Stat. 770; Pub. L. 92–419, title I, § 102, Aug. 30, 1972, 86 Stat. 657; Pub. L. 95–334, title I, § 102, Aug. 4, 1978, 92 Stat. 421; Pub. L. 101–624, title XVIII, § 1802(a), Nov. 28, 1990, 104 Stat. 3817; Pub. L. 102–237, title V, § 501(a), Dec. 13, 1991, 105 Stat. 1865; Pub. L. 104–127, title VI, § 603, Apr. 4, 1996, 110 Stat. 1085; Pub. L. 110–234, title V, § 5002, May 22, 2008, 122 Stat. 1142; Pub. L. 110–246, § 4(a), title V, § 5002, June 18, 2008, 122 Stat. 1664, 1904; Pub. L. 113–79, title V, §§ 5001(c)(1), 5002, Feb. 7, 2014, 128 Stat. 833; Pub. L. 115–334, title V, § 5102, Dec. 20, 2018, 132 Stat. 4669.)

CITE AS: 7 USC 1924

§ 1925. Limitations on amount of farm ownership loans
(a) In general
(b) Determination of value
(c) Inflation percentage
For purposes of this section, the inflation percentage applicable to a fiscal year is the percentage (if any) by which—
(1) the average of the Prices Paid By Farmers Index (as compiled by the National Agricultural Statistics Service of the Department of Agriculture) for the 12-month period ending on July 31 of the immediately preceding fiscal year; exceeds
(2) the average of such index (as so defined) for the 12-month period that immediately precedes the 12-month period described in paragraph (1).
(Pub. L. 87–128, title III, § 305, Aug. 8, 1961, 75 Stat. 308; Pub. L. 91–620, § 1, Dec. 31, 1970, 84 Stat. 1862; Pub. L. 92–419, title I, § 103, Aug. 30, 1972, 86 Stat. 658; Pub. L. 91–524, title VIII, § 807, as added Pub. L. 93–86, § 1(27)(B), Aug. 10, 1973, 87 Stat. 237; Pub. L. 95–334, title I, § 103, Aug. 4, 1978, 92 Stat. 421; Pub. L. 102–554, § 3, Oct. 28, 1992, 106 Stat. 4142; Pub. L. 105–277, div. A, § 101(a) [title VIII, § 806(a)], Oct. 21, 1998, 112 Stat. 2681, 2681–39; Pub. L. 110–234, title V, § 5003, May 22, 2008, 122 Stat. 1144; Pub. L. 110–246, § 4(a), title V, § 5003, June 18, 2008, 122 Stat. 1664, 1905; Pub. L. 115–334, title V, § 5103, Dec. 20, 2018, 132 Stat. 4669.)

CITE AS: 7 USC 1925

§ 1926. Water and waste facility loans and grants
(a) In general
(1) The Secretary is also authorized to make or insure loans to associations, including corporations not operated for profit, Indian tribes on Federal and State reservations and other federally recognized Indian tribes, and public and quasi-public agencies to provide for the application or establishment of soil conservation practices, shifts in land use, the conservation, development, use, and control of water, and the installation or improvement of drainage or waste disposal facilities, recreational developments, and essential community facilities including necessary related equipment, all primarily serving farmers, ranchers, farm tenants, farm laborers, rural businesses, and other rural residents, and to furnish financial assistance or other aid in planning projects for such purposes. The Secretary may also make or insure loans to communities that have been designated as rural empowerment zones or rural enterprise communities pursuant to part I of subchapter U of chapter 1 of title 26, or as rural enterprise communities pursuant to section 766 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1999 (Public Law 105–277; 112 Stat. 2681, 2681–37), to provide for the installation or improvement of essential community facilities including necessary related equipment, and to furnish financial assistance or other aid in planning projects for such purposes. The Secretary may also make loans to any borrower to whom a loan has been made under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.), for the conservation, development, use, and control of water, and the installation of drainage or waste disposal facilities, primarily serving farmers, ranchers, farm tenants, farm laborers, rural businesses, and other rural residents. When any loan made for a purpose specified in this paragraph is sold out of the Agricultural Credit Insurance Fund as an insured loan, the interest or other income thereon paid to an insured holder shall be included in gross income for purposes of chapter 1 of title 26. With respect to loans of less than $500,000 made or insured under this paragraph that are evidenced by notes and mortgages, as distinguished from bond issues, borrowers shall not be required to appoint bond counsel to review the legal validity of the loan whenever the Secretary has available legal counsel to perform such review.
(2)Water, waste disposal, and wastewater facility grants.—
(A)Authority.—
(i)In general.—The Secretary is authorized to make grants to such associations to finance specific projects for works for the development, storage, treatment, purification, or distribution of water or the collection, treatment, or disposal of waste in rural areas.
(ii)Amount.—The amount of any grant made under the authority of this subparagraph shall not exceed 75 per centum of the development cost of the project to serve the area which the association determines can be feasibly served by the facility and to adequately serve the reasonably foreseeable growth needs of the area.
(iii)Grant rate.—The Secretary shall fix the grant rate for each project in conformity with regulations issued by the Secretary that shall provide for a graduated scale of grant rates establishing higher rates for projects in communities that have lower community population and income levels.
(B)Revolving funds for financing water and wastewater projects.—
(i)In general.—The Secretary may make grants to qualified private, nonprofit entities to capitalize revolving funds for the purpose of providing financing to eligible entities for—(I) predevelopment costs associated with proposed water and wastewater projects or with existing water and wastewater systems; and(II) short-term costs incurred for replacement equipment, small-scale extension services, or other small capital projects that are not part of the regular operations and maintenance activities of existing water and wastewater systems.
(ii)Eligible entities.—To be eligible to obtain financing from a revolving fund under clause (i), an eligible entity must be eligible to obtain a loan, loan guarantee, or grant under paragraph (1) or this paragraph.
(iii)Maximum amount of financing.—The amount of financing made to an eligible entity under this subparagraph shall not exceed—(I) $200,000 for costs described in clause (i)(I); and(II) $200,000 for costs described in clause (i)(II).
(iv)Term.—The term of financing provided to an eligible entity under this subparagraph shall not exceed 10 years.
(v)Administration.—The Secretary shall limit the amount of grant funds that may be used by a grant recipient for administrative costs incurred under this subparagraph.
(vi)Annual report.—A nonprofit entity receiving a grant under this subparagraph shall submit to the Secretary an annual report that describes the number and size of communities served and the type of financing provided.
(vii)Authorization of appropriations.—There are authorized to be appropriated to carry out this subparagraph $15,000,000 for each of fiscal years 2019 through 2023.
(C)Special evaluation assistance for rural communities and households program.—
(i)In general.—The Secretary may establish the Special Evaluation Assistance for Rural Communities and Households (SEARCH) program, to make predevelopment planning grants for feasibility studies, design assistance, and technical assistance, to financially distressed communities in rural areas with populations of 2,500 or fewer inhabitants for water and waste disposal projects described in paragraph (1), this paragraph, and paragraph (24).
(ii)Terms.—(I)Documentation.—With respect to grants made under this subparagraph, the Secretary shall require the lowest amount of documentation practicable.(II)Matching.—Notwithstanding any other provisions in this subsection, the Secretary may fund up to 100 percent of the eligible costs of grants provided under this subparagraph, as determined by the Secretary.
(iii)Funding.—The Secretary may use not more than 4 percent of the total amount of funds made available for a fiscal year for water, waste disposal, and essential community facility activities under this chapter to carry out this subparagraph.
(iv)Relationship to other authority.—The funds and authorities provided under this subparagraph are in addition to any other funds or authorities the Secretary may have to carry out activities described in clause (i).
(3) No grant shall be made under paragraph (2) of this subsection in connection with any project unless the Secretary determines that the project (i) will serve a rural area which, if such project is carried out, is not likely to decline in population below that for which the project was designed, (ii) is designed and constructed so that adequate capacity will or can be made available to serve the present population of the area to the extent feasible and to serve the reasonably foreseeable growth needs of the area, and (iii) is necessary for an orderly community development consistent with a comprehensive community water, waste disposal, or other development plan of the rural area.
(4)
(A) The term “development cost” means the cost of construction of a facility and the land, easements, and rights-of-way, and water rights necessary to the construction and operation of the facility.
(B) The term “project” shall include facilities providing central service or facilities serving individual properties, or both.
(5)Application requirements.—Not earlier than 60 days before a preliminary application is filed for a loan under paragraph (1) or a grant under paragraph (2) for a water or waste disposal purpose, a notice of the intent of the applicant to apply for the loan or grant shall be published in a general circulation newspaper. The selection of engineers for a project design shall be done by a request for proposals by the applicant.
(6) The Secretary may make grants aggregating not to exceed $30,000,000 in any fiscal year to public bodies or such other agencies as the Secretary may determine having authority to prepare comprehensive plans for the development of water or waste disposal systems in rural areas which do not have funds available for immediate undertaking of the preparation of such plan.
(7) Repealed. Pub. L. 107–171, title VI, § 6020(b)(1), May 13, 2002, 116 Stat. 363.
(8) In each instance where the Secretary receives two or more applications for financial assistance for projects that would serve substantially the same group of residents within a single rural area, and one such application is submitted by a city, town, county or other unit of general local government, he shall, in the absence of substantial reasons to the contrary, provide such assistance to such city, town, county or other unit of general local government.
(9)Conformity with state drinking water standards.—No Federal funds shall be made available under this section for a water system unless the Secretary determines that the water system will make significant progress toward meeting the standards established under title XIV of the Public Health Service Act (commonly known as the “Safe Drinking Water Act”) (42 U.S.C. 300f et seq.).
(10)Conformity with federal and state water pollution control standards.—No Federal funds shall be made available under this section for a water treatment discharge or waste disposal system unless the Secretary determines that the effluent from the system conforms with applicable Federal and State water pollution control standards.
(11) Repealed. Pub. L. 113–79, title VI, § 6012(b), Feb. 7, 2014, 128 Stat. 845.
(12)
(A) The Secretary shall, in cooperation with institutions eligible to receive funds under the Act of July 2, 1862 (12 Stat. 503–505, as amended; 7 U.S.C. 301–305, 307 and 308), or the Act of August 30, 1890 (26 Stat. 417–419, as amended; 7 U.S.C. 321–326 and 328), including the Tuskegee Institute and State, substate, and regional planning bodies, establish a system for the dissemination of information and technical assistance on federally sponsored or funded programs. The system shall be for the use of institutions eligible to receive funds under the Act of July 2, 1862 (12 Stat. 503–505, as amended; 7 U.S.C. 301–305, 307, and 308), or the Act of August 30, 1890 (26 Stat. 417–419, as amended; 7 U.S.C. 321–326 and 328), including the Tuskegee Institute and State, substate, and regional planning bodies, and other persons concerned with rural development.
(B) The informational system developed under this paragraph shall contain all pertinent information, including, but not limited to, information contained in the Federal Procurement Data System, Federal Assistance Program Retrieval System, Catalogue of Federal Domestic Assistance, Geographic Distribution of Federal Funds, United States Census, and Code of Federal Regulations.
(C) The Secretary shall obtain from all other Federal departments and agencies comprehensive, relevant, and applicable information on programs under their jurisdiction that are operated in rural areas.
(D) Of the sums authorized to be appropriated to carry out the provisions of this chapter, not more than $1,000,000 per year may be expended to carry out the provisions of this paragraph.
(13) In the making of loans and grants for community waste disposal and water facilities under paragraphs (1) and (2) of this subsection the Secretary shall accord highest priority to the application of any municipality or other public agency (including an Indian tribe on a Federal or State reservation or other federally recognized Indian tribal group) in a rural community having a population not in excess of five thousand five hundred and which, in the case of water facility loans, has a community water supply system, where the Secretary determines that due to unanticipated diminution or deterioration of its water supply, immediate action is needed, or in the case of waste disposal, has a community waste disposal system, where the Secretary determines that due to unanticipated occurrences the system is not adequate to the needs of the community. The Secretary shall utilize the Soil Conservation Service in rendering technical assistance to applicants under this paragraph to the extent he deems appropriate.
(14)Rural water and wastewater technical assistance and training programs.—
(A)In general.—The Secretary may make grants to private nonprofit organizations for the purpose of enabling them to provide to associations described in paragraph (1) of this subsection technical assistance and training to—
(i) identify, and evaluate alternative solutions to, problems relating to the obtaining, storage, treatment, purification, or distribution of water or the collection, treatment, or disposal of waste in rural areas;
(ii) prepare applications to receive financial assistance for any purpose specified in paragraph (2) of this subsection from any public or private source;
(iii) improve the operation and maintenance practices at any existing works for the storage, treatment, purification, or distribution of water or the collection, treatment, or disposal of waste in rural areas;
(iv) identify options to enhance the long-term sustainability of rural water and waste systems, including operational practices, revenue enhancements, partnerships, consolidation, regionalization, or contract services; and
(v) address the contamination of drinking water and surface water supplies by emerging contaminants, including per- and polyfluoroalkyl substances.
(B)Selection priority.—In selecting recipients of grants to be made under subparagraph (A), the Secretary shall give priority to private nonprofit organizations that have experience in providing the technical assistance and training described in subparagraph (A) to associations serving rural areas in which residents have low income and in which water supply systems or waste facilities are unhealthful.
(C)Funding.—Not less than 3 percent and not more than 5 percent of any funds appropriated to carry out paragraph (2) of this subsection for any fiscal year shall be reserved for grants under subparagraph (A) unless the applications, qualifying for grants, received by the Secretary from eligible nonprofit organizations for the fiscal year total less than 3 percent of those funds.
(15) In the case of water and waste disposal facility projects serving more than one separate rural community, the Secretary shall use the median population level and the community income level of all the separate communities to be served in applying the standards specified in paragraph (2) of this subsection and section 1927(a)(3)(A) of this title.
(16) Grants under paragraph (2) of this subsection may be used to pay the local share requirements of another Federal grant-in-aid program to the extent permitted under the law providing for such grant-in-aid program.
(17)
(A) In the approval and administration of a loan made under paragraph (1) for a water or waste disposal facility, the Secretary shall consider fully any recommendation made by the loan applicant or borrower concerning the technical design and choice of materials to be used for such facility.
(B) If the Secretary determines that a design or materials, other than those that were recommended, should be used in the water or waste disposal facility, the Secretary shall provide such applicant or borrower with a comprehensive justification for such determination.
(18) In making or insuring loans or making grants under this subsection, the Secretary may not condition approval of such loans or grants upon any requirement, condition or certification other than those specified under this chapter.
(19)Community facilities grant program.—
(A)In general.—The Secretary may make grants, in a total amount not to exceed $10,000,000 for any fiscal year, to associations, units of general local government, nonprofit corporations, Indian Tribes (as defined in section 5304(e) of title 25), and federally recognized Indian tribes to provide the Federal share of the cost of developing specific essential community facilities in rural areas.
(B)Federal share.—
(i)In general.—Except as provided in clauses (ii) and (iii), the Secretary shall, by regulation, establish the amount of the Federal share of the cost of the facility under this paragraph.
(ii)Maximum amount.—The amount of a grant provided under this paragraph for a facility shall not exceed 75 percent of the cost of developing the facility.
(iii)Graduated scale.—The Secretary shall provide for a graduated scale for the amount of the Federal share provided under this paragraph, with higher Federal shares for facilities in communities that have lower community population and income levels, as determined by the Secretary.
(20)Community facilities grant program for rural communities with extreme unemployment and severe economic depression.—
(A)Definition of not employed rate.—In this paragraph, the term “not employed rate”, with respect to a community, means the percentage of individuals over the age of 18 who reside within the community and who are ready, willing, and able to be employed but are unable to find employment, as determined by the department of labor of the State in which the community is located.
(B)Grant authority.—The Secretary may make grants to associations, units of general local government, nonprofit corporations, and Indian tribes (as defined in section 5304 of title 25) in a State to provide the Federal share of the cost of developing specific essential community facilities in rural communities with respect to which the not employed rate is greater than the lesser of—
(i) 500 percent of the average national unemployment rate on November 9, 2000, as determined by the Bureau of Labor Statistics; or
(ii) 200 percent of the average national unemployment rate during the Great Depression, as determined by the Bureau of Labor Statistics.
(C)Federal share.—Paragraph (19)(B) shall apply to a grant made under this paragraph.
(D)Authorization of appropriations.—There are authorized to be appropriated to carry out this paragraph $50,000,000 for fiscal year 2001 and such sums as are necessary for each subsequent fiscal year, of which not more than 5 percent of the amount made available for a fiscal year shall be available for community planning and implementation.
(E)Rural broadband.—Notwithstanding subparagraph (C), the Secretary may make grants to State agencies for use by regulatory commissions in states 1
1 So in original. Probably should be capitalized.
with rural communities without local broadband service to establish a competitively, technologically neutral grant program to telecommunications carriers or cable operators that establish common carrier facilities and services which, in the commission’s determination, will result in the long-term availability to such communities of affordable broadband services which are used for the provision of high speed Internet access.
(21)Community facilities grant program for rural communities with high levels of out-migration or loss of population.—
(A)Grant authority.—The Secretary may make grants to associations, units of general local government, nonprofit corporations, and Indian tribes (as defined in section 5304 of title 25) in a State to provide the Federal share of the cost of developing specific essential community facilities in any geographic area—
(i) that is represented by—(I) any political subdivision of a State;(II) an Indian tribe on a Federal or State reservation; or(III) other federally recognized Indian tribal group;
(ii) that is located in a rural area (as defined in section 2009 2
2 See References in Text note below.
of this title);
(iii) with respect to which, during the most recent 5-year period, the net out-migration of inhabitants, or other population loss, from the area equals or exceeds 5 percent of the population of the area; and
(iv) that has a median household income that is less than the nonmetropolitan median household income of the United States.
(B)Federal share.—Paragraph (19)(B) shall apply to a grant made under this paragraph.
(C) Authorization of appropriations.—There are authorized to be appropriated to carry out this paragraph $50,000,000 for fiscal year 2001 and such sums as are necessary for each subsequent fiscal year, of which not more than 5 percent of the amount made available for a fiscal year shall be available for community planning and implementation.
(22)Rural water and wastewater circuit rider program.—
(A)In general.—The Secretary shall continue a national rural water and wastewater circuit rider program that—
(i) is consistent with the activities and results of the program conducted before February 7, 2014, as determined by the Secretary; and
(ii) receives funding from the Secretary, acting through the Rural Utilities Service.
(B)Authorization of appropriations.—There is authorized to be appropriated to carry out this paragraph $25,000,000 for each of fiscal years 2019 through 2023.
(23) Repealed. Pub. L. 115–334, title VI, § 6601(a)(1)(A), Dec. 20, 2018, 132 Stat. 4775.
(24)Loan guarantees for water, wastewater, and essential community facilities loans.—
(A)In general.—The Secretary may guarantee a loan made to finance a community facility or water or waste facility project in a rural area, including a loan financed by the net proceeds of a bond described in section 142(a) of title 26.
(B)Requirements.—To be eligible for a loan guarantee under subparagraph (A), an individual or entity offering to purchase the loan shall demonstrate to the Secretary that the person has—
(i) the capabilities and resources necessary to service the loan in a manner that ensures the continued performance of the loan, as determined by the Secretary; and
(ii) the ability to generate capital to provide borrowers of the loan with the additional credit necessary to properly service the loan.
(C)Use of loan guarantees for community facilities.—The Secretary shall consider the benefits to communities that result from using loan guarantees in carrying out the community facilities program and, to the maximum extent practicable, use guarantees to enhance community involvement.
(D)Priority.—
(i)Water or waste facility.—The Secretary shall prioritize water and waste facility projects under this paragraph in rural areas with a population of not more than 10,000 people.
(ii)Community facility.—Of the funds made available to carry out this paragraph for community facility loan guarantees for a fiscal year the following amounts shall be reserved for projects in rural areas with a population of not more than 20,000 inhabitants:(I) 100 percent of the first $200,000,000 so made available;(II) 50 percent of the next $200,000,000 so made available; and(III) 25 percent of all amounts exceeding $400,000,000 so made available,
except that, to the extent that the Secretary demonstrates that the funds so reserved are not needed to finance a community facility project in such a rural area, the Secretary may use the funds for other community facility projects in accordance with this paragraph.
(25)Tribal college and university essential community facilities.—
(A)In general.—The Secretary may make grants to an entity that is a Tribal College or University (as defined in section 1059c of title 20) to provide the Federal share of the cost of developing specific Tribal College or University essential community facilities in rural areas.
(B)Federal share.—The Secretary shall establish the maximum percentage of the cost of the facility that may be covered by a grant under this paragraph, except that the Secretary may not require non-Federal financial support in an amount that is greater than 5 percent of the total cost of the facility.
(C)Authorization of appropriations.—There is authorized to be appropriated to carry out this paragraph $10,000,000 for each of fiscal years 2008 through 2023.
(26)Essential community facilities technical assistance and training.—
(A)In general.—The Secretary may make grants to public bodies and private nonprofit corporations (such as States, counties, cities, townships, and incorporated towns and villages, boroughs, authorities, districts, and Indian tribes on Federal and State reservations) that will serve rural areas for the purpose of enabling the public bodies and private nonprofit corporations to provide to associations described in paragraph (1) technical assistance and training, with respect to essential community facilities programs authorized under this subsection—
(i) to assist communities in identifying and planning for community facility needs;
(ii) to identify public and private resources to finance community facility needs;
(iii) to prepare reports and surveys necessary to request financial assistance to develop community facilities;
(iv) to prepare applications for financial assistance;
(v) to improve the management, including financial management, related to the operation of community facilities; or
(vi) to assist with other areas of need identified by the Secretary.
(B)Selection priority.—In selecting recipients of grants under this paragraph, the Secretary shall give priority to private, nonprofit, or public organizations that have experience in providing technical assistance and training to rural entities.
(C)Funding.—Not less than 3 nor more than 5 percent of any funds appropriated to carry out each of the essential community facilities grant, loan and loan guarantee programs as authorized under this subsection for a fiscal year shall be reserved for grants under this paragraph.
(b) Curtailment or limitation of service prohibited
(c) Repealed. Pub. L. 91–606, title III, § 302(2), Dec. 31, 1970, 84 Stat. 1759
(d) Carryover of unused authorizations for appropriations
(Pub. L. 87–128, title III, § 306, Aug. 8, 1961, 75 Stat. 308; Pub. L. 87–703, title IV, § 401(2), Sept. 27, 1962, 76 Stat. 632; Pub. L. 89–240, § 1, Oct. 7, 1965, 79 Stat. 931; Pub. L. 89–769, § 6(b), Nov. 6, 1966, 80 Stat. 1318; Pub. L. 90–488, §§ 3–5, Aug. 15, 1968, 82 Stat. 770; Pub. L. 91–524, title VIII, § 806(a), Nov. 30, 1970, 84 Stat. 1383; Pub. L. 91–606, title III, § 302(2), Dec. 31, 1970, 84 Stat. 1759; Pub. L. 91–617, § 1(a), Dec. 31, 1970, 84 Stat. 1855; Pub. L. 92–419, title I, §§ 104–112, Aug. 30, 1972, 86 Stat. 658, 659; Pub. L. 91–524, title VIII, § 816(c), as added Pub. L. 93–86, § 1(27)(B), Aug. 10, 1973, 87 Stat. 240; Pub. L. 95–334, title I, §§ 104–107(a), Aug. 4, 1978, 92 Stat. 421, 422; Pub. L. 96–355, § 7, Sept. 24, 1980, 94 Stat. 1174; Pub. L. 96–438, § 2(1), Oct. 13, 1980, 94 Stat. 1871; Pub. L. 97–35, title I, § 121, Aug. 13, 1981, 95 Stat. 368; Pub. L. 99–198, title XIII, § 1304(a), Dec. 23, 1985, 99 Stat. 1519; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095; Pub. L. 101–624, title XXIII, §§ 2316(b), 2321, 2328, 2329, 2341, 2342, 2393, Nov. 28, 1990, 104 Stat. 4008, 4010, 4017, 4026, 4027, 4057; Pub. L. 102–237, title VII, § 701(a), (h)(1)(A), (B), Dec. 13, 1991, 105 Stat. 1879, 1880; Pub. L. 103–129, § 3, Nov. 1, 1993, 107 Stat. 1366; Pub. L. 103–354, title II, § 235(b)(5), Oct. 13, 1994, 108 Stat. 3222; Pub. L. 104–127, title VII, §§ 741(a), 758, 763, Apr. 4, 1996, 110 Stat. 1122, 1132, 1148; Pub. L. 106–387, § 1(a) [title VII, § 773], Oct. 28, 2000, 114 Stat. 1549, 1549A–45; Pub. L. 106–472, title III, §§ 304(a), 305(a), Nov. 9, 2000, 114 Stat. 2070, 2071; Pub. L. 107–76, title VII, § 762, Nov. 28, 2001, 115 Stat. 743; Pub. L. 107–171, title VI, §§ 6001–6007(a), 6008, 6020(b)(1), May 13, 2002, 116 Stat. 352–355, 363; Pub. L. 110–234, title VI, §§ 6001, 6002(a), 6003–6007, title VII, § 7511(c)(3), May 22, 2008, 122 Stat. 1161, 1162, 1267; Pub. L. 110–246, § 4(a), title VI, §§ 6001, 6002(a), 6003–6007, title VII, § 7511(c)(3), June 18, 2008, 122 Stat. 1664, 1923, 1924, 2029; Pub. L. 113–79, title VI, §§ 6001–6006, 6012(b), Feb. 7, 2014, 128 Stat. 841, 842, 845; Pub. L. 115–334, title VI, §§ 6402(b)–6406, 6601(a)(1)(A), 6701(a)(1), Dec. 20, 2018, 132 Stat. 4757–4759, 4775, 4778.)

CITE AS: 7 USC 1926

§ 1926–1. Repealed. Pub. L. 104–127, title VII, § 702, Apr. 4, 1996, 110 Stat. 1108

CITE AS: 7 USC 1926-1

§ 1926a. Emergency and imminent community water assistance grant program
(a) In generalThe Secretary shall provide grants in accordance with this section to assist the residents of rural areas and small communities to secure adequate quantities of safe water—
(1) after a significant decline in the quantity or quality of water available from the water supplies of such rural areas and small communities, or when such a decline is imminent; or
(2) when repairs, partial replacement, or significant maintenance efforts on established water systems would remedy—
(A) an acute, or imminent, shortage of quality water; or
(B) a significant decline, or imminent decline, in the quantity or quality of water that is available.
(b) PriorityIn carrying out subsection (a), the Secretary shall—
(1) give priority to projects described in subsection (a)(1), particularly to projects to address contamination that—
(A) poses a threat to human health or the environment; and
(B) was caused by circumstances beyond the control of the applicant for a grant, including circumstances that occurred over a period of time; and
(2) provide at least 70 percent of all such grants to such projects.
(c) EligibilityTo be eligible to obtain a grant under this section, an applicant shall—
(1) be a public or private nonprofit entity; and
(2) in the case of a grant made under subsection (a)(1), demonstrate to the Secretary that the decline referred to in such subsection occurred, or will occur, within 2 years of the date the application was filed for such grant.
(d) Uses
(1) In generalGrants made under this section may be used—
(A) for waterline extensions from existing systems, laying of new waterlines, repairs, significant maintenance, digging of new wells, equipment replacement, and hook and tap fees;
(B) for any other appropriate purpose associated with developing sources of, treating, storing, or distributing water;
(C) to assist communities in complying with the requirements of the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.) or the Safe Drinking Water Act (42 U.S.C. 300f et seq.); and
(D) to provide potable water to communities through other means, other than those covered above for not to exceed 120 days when a more permanent solution is not feasible in a shorter time frame. Where drinking water supplies are inadequate due to an event, as determined by the Secretary, including drought, severe weather, or contamination, the Secretary may provide potable water for an additional period of time not to exceed an additional 120 days in order to protect public health.
(2) Joint proposals
(e) Restrictions
(1) Maximum population and incomeNo grant provided under this section shall be used to assist any rural area or community that—
(A) includes any area in any city or town with a population in excess of 10,000 inhabitants according to the most recent decennial census of the United States; or
(B) has a median household income in excess of the State nonmetropolitan median household income.
(2) Set-aside for smaller communities
(f) Maximum grantsGrants made under this section may not exceed—
(1) in the case of each grant made under subsection (a)(1), $1,000,000; and
(2) in the case of each grant made under subsection (a)(2), $150,000.
(g) Full funding
(h) Application
(1) Nationally competitive application process
(2) Timing of review of applications
(A) Simplified application
(B) Priority review
(C) Timing
(i) Funding
(1) Reservation
(A) In general
(B) Release
(i) In general
(ii) Exception
(2) Authorization of appropriations
(Pub. L. 87–128, title III, § 306A, as added Pub. L. 101–82, title V, § 501(a), Aug. 14, 1989, 103 Stat. 584; amended Pub. L. 104–127, title VII, § 742, Apr. 4, 1996, 110 Stat. 1124; Pub. L. 107–171, title VI, § 6009, May 13, 2002, 116 Stat. 356; Pub. L. 110–234, title VI, § 6008, May 22, 2008, 122 Stat. 1163; Pub. L. 110–246, § 4(a), title VI, § 6008, June 18, 2008, 122 Stat. 1664, 1924; Pub. L. 113–79, title VI, § 6007, Feb. 7, 2014, 128 Stat. 843; Pub. L. 115–334, title VI, § 6407(a), Dec. 20, 2018, 132 Stat. 4759.)

CITE AS: 7 USC 1926a

§ 1926b. Repealed. Pub. L. 104–127, title VII, § 743, Apr. 4, 1996, 110 Stat. 1125

CITE AS: 7 USC 1926b

§ 1926c. Water and waste facility loans and grants to alleviate health risks
(a) Loans and grants to persons other than individuals
(1) In general
The Secretary shall make or insure loans and make grants to rural water supply corporations, cooperatives, or similar entities, Indian tribes on Federal and State reservations and other federally recognized Indian tribes, and public agencies, to provide for the conservation, development, use, and control of water (including the extension or improvement of existing water supply systems), and the installation or improvement of drainage or waste disposal facilities and essential community facilities including necessary related equipment. Such loans and grants shall be available only to provide such water and waste facilities and services to communities whose residents face significant health risks, as determined by the Secretary, due to the fact that a significant proportion of the community’s residents do not have access to, or are not served by, adequate affordable—
(A) water supply systems; or
(B) waste disposal facilities.
(2) Certain areas targeted
(A) In general
Loans and grants under paragraph (1) shall be made only if the loan or grant funds will be used primarily to provide water or waste services, or both, to residents of a county—
(i) the per capita income of the residents of which is not more than 70 percent of the national average per capita income, as determined by the Department of Commerce; and
(ii) the unemployment rate of the residents of which is not less than 125 percent of the national average unemployment rate, as determined by the Bureau of Labor Statistics.
(B) Exception
(b) Loans and grants to individuals
(1) In general
(2) Manner in which loans and grants are to be made
Loans and grants to individuals under paragraph (1) shall be made—
(A) directly to such individuals by the Secretary; or
(B) to such individuals through the rural water supply corporation, cooperative, or similar entity, or public agency, providing such water supply or waste disposal services, pursuant to regulations issued by the Secretary.
(c) Preference
The Secretary shall give preference in the awarding of loans and grants—
(1) under subsection (a) to rural water supply corporations, cooperatives, or similar entities, or public agencies, that propose to provide water supply or waste disposal services to the residents of those rural subdivisions commonly referred to as colonias, that are characterized by substandard housing, inadequate roads and drainage, and a lack of adequate water or waste facilities; and
(2) under subsection (b) to individuals who reside in a rural subdivision commonly referred to as a colonia, that is characterized by substandard housing, inadequate roads and drainage, and a lack of adequate water or waste facilities.
(d) “Cooperative” defined
(e) Authorization of appropriations
(1) In general
Subject to paragraph (2), there are authorized to be appropriated—
(A) for grants under this section, $30,000,000 for each fiscal year;
(B) for loans under this section, $30,000,000 for each fiscal year; and
(C) in addition to grants provided under subparagraph (A), for grants under this section to benefit Indian tribes (as defined in section 5304 of title 25), $20,000,000 for each fiscal year.
(2) Exception
(f) Regulations
(Pub. L. 87–128, title III, § 306C, as added Pub. L. 101–624, title XXIII, § 2327, Nov. 28, 1990, 104 Stat. 4015; amended Pub. L. 102–237, title VII, § 701(b), Dec. 13, 1991, 105 Stat. 1879; Pub. L. 102–552, title V, § 516(l), (m), Oct. 28, 1992, 106 Stat. 4139; Pub. L. 102–554, § 24, Oct. 28, 1992, 106 Stat. 4161; Pub. L. 107–171, title VI, § 6010, May 13, 2002, 116 Stat. 357.)

CITE AS: 7 USC 1926c

§ 1926d. Water systems for rural and Native villages in Alaska
(a) In general
(b) Matching funds
(c) Consultation with State of Alaska
(d) Authorization of appropriations
(1) In general
(2) Training and technical assistance
(3) Availability
(Pub. L. 87–128, title III, § 306D, as added Pub. L. 104–127, title VII, § 757, Apr. 4, 1996, 110 Stat. 1131; amended Pub. L. 105–277, div. A, § 101(a) [title VII, § 745], Oct. 21, 1998, 112 Stat. 2681, 2681–32; Pub. L. 106–224, title II, § 256, June 20, 2000, 114 Stat. 424; Pub. L. 107–171, title VI, § 6011, May 13, 2002, 116 Stat. 357; Pub. L. 110–234, title VI, § 6009(a), May 22, 2008, 122 Stat. 1163; Pub. L. 110–246, § 4(a), title VI, § 6009(a), June 18, 2008, 122 Stat. 1664, 1924; Pub. L. 113–79, title VI, § 6008, Feb. 7, 2014, 128 Stat. 843; Pub. L. 115–334, title VI, § 6408, Dec. 20, 2018, 132 Stat. 4761.)

CITE AS: 7 USC 1926d

§ 1926e. Rural decentralized water systems
(a) Definition of eligible individual
(b) Grants
(1) In general
(2) Terms and amounts
(A) Terms of loans
A loan made with grant funds under this section—
(i) shall have an interest rate of 1 percent; and
(ii) shall have a term not to exceed 20 years.
(B) Amounts
(3) Administrative expenses
(4) Ground well water contamination
(c) Priority in awarding grants
(d) Authorization of appropriations
(Pub. L. 87–128, title III, § 306E, as added Pub. L. 107–171, title VI, § 6012(a), May 13, 2002, 116 Stat. 357; amended Pub. L. 110–234, title VI, § 6010, May 22, 2008, 122 Stat. 1163; Pub. L. 110–246, § 4(a), title VI, § 6010, June 18, 2008, 122 Stat. 1664, 1925; Pub. L. 113–79, title VI, § 6009, Feb. 7, 2014, 128 Stat. 843; Pub. L. 115–334, title VI, § 6409, Dec. 20, 2018, 132 Stat. 4761.)

CITE AS: 7 USC 1926e

§ 1926f. Contracts with not-for-profit third parties

On and after November 10, 2005, notwithstanding the provisions of the Consolidated Farm and Rural Development Act [7 U.S.C. 1921 et seq.] (including the associated regulations) governing the Community Facilities Program, the Secretary may allow all Community Facility Program facility borrowers and grantees to enter into contracts with not-for-profit third parties for services consistent with the requirements of the Program, grant, and/or loan: Provided, That the contracts protect the interests of the Government regarding cost, liability, maintenance, and administrative fees.

(Pub. L. 109–97, title VII, § 756, Nov. 10, 2005, 119 Stat. 2157.)

CITE AS: 7 USC 1926f

§ 1927. Repayment requirements
(a) Period of repayment; interest rates
(1) The period for repayment of loans under this subchapter shall not exceed forty years.
(2) Except as otherwise provided in paragraphs (3), (4), (5), and (6) of this subsection, the interest rates on loans under this subchapter shall be as determined by the Secretary, but not in excess of the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans, plus not to exceed 1 per centum, as determined by the Secretary, and adjusted to the nearest one-eighth of 1 per centum.
(3)
(A) Notwithstanding the provisions of the constitution or laws of any State limiting the rate or amount of interest that may be charged, taken, received, or reserved, except as provided in paragraph (6), the interest rates on loans (other than guaranteed loans), to public bodies or nonprofit associations (including Indian tribes on Federal and State reservations and other federally recognized Indian tribal groups) for water and waste disposal facilities and essential community facilities shall be set by the Secretary at rates not to exceed the current market yield for outstanding municipal obligations with remaining periods to maturity comparable to the average maturity for such loans, and adjusted to the nearest one-eighth of 1 per centum; and not in excess of 5 per centum per anspan for any such loans which are for the upgrading of existing facilities or construction of new facilities as required to meet applicable health or sanitary standards in areas where the median household income of the persons to be served by such facility is below the higher of 80 per centum of the statewide nonmetropolitan median household income or the poverty line established by the Office of Management and Budget, as revised under section 9902(2) of title 42 and in other areas as the Secretary may designate where a significant percentage of the persons to be served by such facilities are of low income, as determined by the Secretary; and not in excess of 7 per centum per anspan on loans for such facilities that do not qualify for the 5 per centum per anspan interest rate but are located in areas where the median household income of the persons to be served by the facility does not exceed 100 per centum of the statewide nonmetropolitan median household income.
(B) Except as provided in subparagraph (D) and in paragraph (6), the interest rate on loans (other than guaranteed loans) under section 1934 of this title shall not be—
(i) greater than the sum of—(I) an amount that does not exceed one-half of the current average market yield on outstanding marketable obligations of the United States with maturities of 5 years; and(II) an amount not exceeding 1 percent per year, as the Secretary determines is appropriate; or
(ii) less than 5 percent per year.
(C) Notwithstanding subparagraph (A), the Secretary shall establish loan rates for health care and related facilities based solely on the income of the area to be served, and such rates shall be otherwise consistent with such subparagraph.
(D)Joint financing arrangements.—If a direct farm ownership loan is made under this subchapter as part of a joint financing arrangement and the amount of the direct farm ownership loan does not exceed 50 percent of the total principal amount financed under the arrangement, the interest rate on the direct farm ownership loan shall be a rate equal to the greater of—
(i) the difference between—(I) 2 percent; and(II) the interest rate for farm ownership loans under this subchapter; or
(ii) 2.5 percent.
(E)Interest rates for water and waste disposal facilities loans.—
(i)In general.—Except as provided in clause (ii) and notwithstanding subparagraph (A), in the case of a direct loan for a water or waste disposal facility—(I) in the case of a loan that would be subject to the 5 percent interest rate limitation under subparagraph (A), the Secretary shall establish the interest rate at a rate that is equal to 60 percent of the current market yield for outstanding municipal obligations with remaining periods to maturity comparable to the average maturity of the loan, adjusted to the nearest ⅛ of 1 percent; and(II) in the case of a loan that would be subject to the 7 percent limitation under subparagraph (A), the Secretary shall establish the interest rate at a rate that is equal to 80 percent of the current market yield for outstanding municipal obligations with remaining periods to maturity comparable to the average maturity of the loan, adjusted to the nearest ⅛ of 1 percent.
(ii)Exception.—Clause (i) does not apply to a loan for a specific project that is the subject of a loan that has been approved, but not closed, as of the date of enactment of this subparagraph.
(4) Except as provided in paragraph (6), the interest rates on loans under sections 1926(a)(1) and 1932 of this title (other than guaranteed loans and loans as described in paragraph (3) of this subsection) shall be as determined by the Secretary, but not less than such rates as determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans, adjusted in the judgment of the Secretary of the Treasury to provide for rates comparable to the rates prevailing in the private market for similar loans and considering the Secretary’s insurance of the loans, plus an additional charge, prescribed by the Secretary, to cover the Secretary’s losses and cost of administration, which charge shall be deposited in the Rural Development Insurance Fund, and further adjusted to the nearest one-eighth of 1 per centum.
(5)
(A) Except as provided in subparagraph (B), the interest rate on any loan made under this subchapter as a guaranteed loan shall be such rate as may be agreed upon by the borrower and the lender, but not in excess of a rate as may be determined by the Secretary.
(B) In the case of a loan made under section 1932 of this title as a guaranteed loan, subparagraph (A) shall apply notwithstanding the provisions of the constitution or laws of any State limiting the rate or amount of interest that may be charged, taken, received, or reserved.
(6)
(A) Notwithstanding any other provision of this section, in the case of loans (other than guaranteed loans) made or insured under the authorities of this chapter specified in subparagraph (B) for activities that involve the use of prime farmland as defined in subparagraph (C), the interest rates shall be the interest rates otherwise applicable under this section increased by 2 per centum per anspan. Wherever practicable, construction by a State, municipality, or other political subdivision of local government that is supported by loans described in the preceding sentence shall be placed on land that is not prime farmland, in order to preserve the maximum practicable amount of prime farmlands for production of food and fiber. Where other options exist for the siting of such construction and where the governmental authority still desires to carry out such construction on prime farmland, the 2 per centum interest rate increase provided by this clause shall apply, but such increased interest rate shall not apply where such other options do not exist.
(B) The authorities referred to in subparagraph (A) are—
(i) the provisions of section 1926(a)(1) of this title relating to loans for recreational developments and essential community facilities,
(ii)section 1932(a)(2)(A) of this title; 1
1 So in original. The semicolon probably should be a comma.
and
(iii)section 1932(d) of this title.
(C) For purposes of this paragraph, the term “prime farmland” means prime farmlands and unique farmland as those terms are defined in sections 657.5(a) and (b) of title 7, Code of Federal Regulations (1980).
(b) Payment of charges; prepayment of taxes and insurance
(c) Mortgages, liens, and other security
(d) Additional collateralThe Secretary may not—
(1) require any borrower to provide additional collateral to secure a farmer program loan made or insured under this chapter, if the borrower is current in the payment of principal and interest on the loan; or
(2) bring any action to foreclose, or otherwise liquidate, any such loan as a result of the failure of a borrower to provide additional collateral to secure a loan, if the borrower was current in the payment of principal and interest on the loan at the time the additional collateral was requested.
(Pub. L. 87–128, title III, § 307, Aug. 8, 1961, 75 Stat. 308; Pub. L. 92–419, title I, §§ 113, 114, 128(b), Aug. 30, 1972, 86 Stat. 660, 666; Pub. L. 95–334, title I, § 108, Aug. 4, 1978, 92 Stat. 422; Pub. L. 97–35, title I, § 160(a), Aug. 13, 1981, 95 Stat. 376; Pub. L. 99–198, title XIII, §§ 1304A, 1305, Dec. 23, 1985, 99 Stat. 1521; Pub. L. 100–233, title VI, §§ 603, 604, Jan. 6, 1988, 101 Stat. 1665, 1666; Pub. L. 101–624, title XVIII, § 1803(a), title XXIII, § 2383, Nov. 28, 1990, 104 Stat. 3818, 4050; Pub. L. 102–552, title V, § 516(c)(1), Oct. 28, 1992, 106 Stat. 4137; Pub. L. 103–328, title I, § 113(a), Sept. 29, 1994, 108 Stat. 2366; Pub. L. 104–127, title VI, §§ 604, 661(a), title VII, § 747(b)(1), Apr. 4, 1996, 110 Stat. 1086, 1106, 1128; Pub. L. 110–234, title VI, §§ 6011, 6012(b)(1), May 22, 2008, 122 Stat. 1163, 1165; Pub. L. 110–246, § 4(a), title VI, §§ 6011, 6012(b)(1), June 18, 2008, 122 Stat. 1664, 1925, 1927; Pub. L. 113–79, title V, §§ 5003, 5004, Feb. 7, 2014, 128 Stat. 834.)

CITE AS: 7 USC 1927

§ 1927a. Loan interest rates charged by Farmers Home Administration; grant funds associated with loans

Effective October 1, 1981, and thereafter, in the case of water and waste disposal and community facility borrowers, and effective November 12, 1983, and thereafter, in the case of housing and farm borrowers, upon request of the borrower, the interest rate charged by the Farmers Home Administration to such borrowers shall be the lower of the rates in effect at either the time of loan approval or loan closing and any Farmers Home Administration grant funds associated with such loans shall be set in amount based on the interest rate in effect at the time of loan approval.

(Pub. L. 99–88, title I, § 100, Aug. 15, 1985, 99 Stat. 296; Pub. L. 100–233, title VI, § 615(b)(1)(A), Jan. 6, 1988, 101 Stat. 1681.)

CITE AS: 7 USC 1927a

§ 1928. Full faith and credit
(a) In general
(b) Contestability
A contract of insurance or guarantee executed by the Secretary under this chapter shall be incontestable except for fraud or misrepresentation that the lender or any holder—
(1) has actual knowledge of at the time the contract or guarantee is executed; or
(2) participates in or condones.
(Pub. L. 87–128, title III, § 308, Aug. 8, 1961, 75 Stat. 308; Pub. L. 87–798, Oct. 11, 1962, 76 Stat. 908; Pub. L. 89–240, § 2(a), Oct. 7, 1965, 79 Stat. 932; Pub. L. 90–488, § 6, Aug. 15, 1968, 82 Stat. 770; Pub. L. 92–133, Oct. 5, 1971, 85 Stat. 364; Pub. L. 101–624, title XXIII, § 2388(a), Nov. 28, 1990, 104 Stat. 4052; Pub. L. 104–127, title VI, § 605, Apr. 4, 1996, 110 Stat. 1086.)

CITE AS: 7 USC 1928

§ 1929. Agricultural Credit Insurance Fund
(a) Revolving fund
(b) Deposits of funds; investments; purchase of notes
(c) Notes; form and denominations; maturities; terms and conditions; interest rate; purchase by Treasury; public debt transaction
(d) Notes and security as part of fund; collection or sale of notes; deposit of net proceeds in fund
(e) Deposit in fund of portion of charge on outstanding principal obligations; availability of remainder of charge, and merger with appropriations, for administrative expenses
(f) Utilization of fundThe Secretary may utilize the fund—
(1) to pay amounts to which the holder of the note is entitled on loans heretofore or hereafter insured accruing between the date of any payments made by the borrower and the date of transmittal of any such payments to the lender. In the discretion of the Secretary, payments other than final payments need not be remitted to the holder until due or until the next agreed annual or semiannual remittance date;
(2) to pay to the holder of the notes any deferred or defaulted installment or, upon assignment of the note to the Secretary at the Secretary’s request, the entire balance due on the loan;
(3) to purchase notes in accordance with agreements previously entered into;
(4) to pay for contract services, taxes, insurance, prior liens, expenses necessary to make fiscal adjustments in connection with the application and transmittal of collections and other expenses and advances authorized in connection with insured loans, including the difference between interest payable by borrowers and interest to which insured lenders or insured holders are entitled under agreements with the Secretary included in contracts of insurance;
(5) to pay the Secretary’s costs of administration necessary to insure, make grants, service, and otherwise carry out the programs under this chapter not specifically covered by the Rural Development Insurance Fund of section 1929a of this title, including costs of the Secretary incidental to guaranteeing loans under this chapter, either directly from the Fund or by transfers from the Fund to, and merger with, any appropriations for administrative expenses.
(g) Transfer of funds from Farmers Home Administration direct loan account and Emergency Credit Revolving Fund; abolition of such account and fund; payments from Agricultural Credit Insurance Fund; interest
(1) The assets and liabilities of, and authorizations applicable to, the Farmers Home Administration direct loan account created by section 1988(c) of this title (before the amendment made by section 749(a)(1) of the Federal Agriculture Improvement and Reform Act of 1996) and the Emergency Credit Revolving Fund referred to in section 1966 of this title are hereby transferred to the fund, and such account and such revolving fund are hereby abolished. Such assets and their proceeds, including loans made out of the fund pursuant to this section, shall be subject to the provisions of this section, the last sentence of section 1926(a)(1), and the last sentence of section 1927 of this title.
(2) From time to time, and at least at the close of each fiscal year, the Secretary shall pay from the fund into the Treasury as miscellaneous receipts interest on the value as determined by the Secretary, with the approval of the Comptroller General, of the Government’s equity transferred to the fund pursuant to the first sentence of this subsection plus the cumulative amount of appropriations made available after enactment of this provision as capital and for administration of the programs financed from the fund, less the average undisbursed cash balance in the fund during the year. The rate of such interest shall be determined by the Secretary of the Treasury, taking into consideration the current average yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of loans made or insured from the fund, adjusted to the nearest one-eighth of 1 per centum. Interest payments may be deferred with the approval of the Secretary of the Treasury, but any interest payments so deferred shall themselves bear interest. If at any time the Secretary determines that moneys in the fund exceed present and any reasonably prospective future requirements of the fund, such excess may be transferred to the general fund of the Treasury.
(h) Guaranteed loans; interest rate for loans sold into secondary market; loan fees
(1) The Secretary may provide financial assistance to borrowers for purposes provided in this chapter by guaranteeing loans made by any Federal or State chartered bank, savings and loan association, cooperative lending agency, or other legally organized lending agency.
(2) The interest rate payable by a borrower on the portion of a guaranteed loan that is sold by a lender to the secondary market under this chapter may be lower than the interest rate charged on the portion retained by the lender, but shall not exceed the average interest rate charged by the lender on loans made to farm and ranch borrowers.
(3) With regard to any loan guarantee on a loan made by a commercial or cooperative lender related to a loan made by the Secretary under section 1935 of this title—
(A) the Secretary shall not charge a fee to any person (including a lender); and
(B) a lender may charge a loan origination and servicing fee in an amount not to exceed 1 percent of the amount of the loan.
(4)Maximum guarantee of 90 percent.—Except as provided in paragraphs (5), (6), and (7), a loan guarantee under this chapter shall be for not more than 90 percent of the principal and interest due on the loan.
(5)Refinanced loans guaranteed at 95 percent.—The Secretary shall guarantee 95 percent of—
(A) in the case of a loan that solely refinances a direct loan made under this chapter, the principal and interest due on the loan on the date of the refinancing; or
(B) in the case of a loan that is used for multiple purposes, the portion of the loan that refinances the principal and interest due on a direct loan made under this chapter that is outstanding on the date the loan is guaranteed.
(6)Beginning farmer loans guaranteed up to 95 percent.—The Secretary may guarantee not more than 95 percent of—
(A) a farm ownership loan for acquiring a farm or ranch to a borrower who is participating in the down payment loan program under section 1935 of this title; or
(B) an operating loan to a borrower who is participating in the down payment loan program under section 1935 of this title that is made during the period that the borrower has a direct loan outstanding under this subchapter for acquiring a farm or ranch.
(7)Amount of guarantee of loans for farm operations on tribal lands.—In the case of an operating loan made to a farmer or rancher whose farm or ranch land is subject to the jurisdiction of an Indian tribe and whose loan is secured by 1 or more security instruments that are subject to the jurisdiction of an Indian tribe, the Secretary shall guarantee 95 percent of the loan.
(i) Coordination of assistance for qualified beginning farmers and ranchers
(1) Not later than 60 days after any State expresses to the Secretary, in writing, a desire to coordinate the provision of financial assistance to qualified beginning farmers and ranchers in the State, the Secretary and the State shall conclude a joint memorandum of understanding that shall govern the coordination of the provision of the financial assistance by the State and the Secretary.
(2) The memorandum of understanding shall provide that if a State beginning farmer program makes a commitment to provide a qualified beginning farmer or rancher with financing to establish or maintain a viable farming or ranching operation, the Secretary shall, subject to applicable law, normal loan approval criteria, and the availability of funds provide the farmer or rancher with a down payment loan under section 1935 of this title or a guarantee of the financing provided by the State program, or both.
(3) The Secretary shall not charge any person (including a lender) any fee with respect to the provision of any guarantee under this subsection.
(4) The Secretary shall notify each State of the provisions of this subsection.
(5) As used in paragraph (1), the term “State beginning farmer program” means any program that is—
(A) carried out by, or under contract with, a State; and
(B) designed to assist persons in obtaining the financial assistance necessary to enter agriculture and establish viable farming or ranching operations.
(j) Guarantee of loans made under State beginning farmer or rancher programs
(Pub. L. 87–128, title III, § 309, Aug. 8, 1961, 75 Stat. 309; Pub. L. 87–703, title IV, § 401(3), Sept. 27, 1962, 76 Stat. 632; Pub. L. 89–240, § 2(b), (c), Oct. 7, 1965, 79 Stat. 932; Pub. L. 89–633, Oct. 8, 1966, 80 Stat. 879; Pub. L. 90–488, § 7, Aug. 15, 1968, 82 Stat. 771; Pub. L. 92–419, title I, § 115, Aug. 30, 1972, 86 Stat. 660; Pub. L. 95–113, title XV, § 1510(a), Sept. 29, 1977, 91 Stat. 1022; Pub. L. 95–334, title I, § 109(a), Aug. 4, 1978, 92 Stat. 423; Pub. L. 101–624, title XXIII, § 2302(a)(2), Nov. 28, 1990, 104 Stat. 3980; Pub. L. 102–554, §§ 4, 5(a), Oct. 28, 1992, 106 Stat. 4143; Pub. L. 104–127, title VI, §§ 606, 661(b), title VII, §§ 744, 749(b)(1), Apr. 4, 1996, 110 Stat. 1086, 1106, 1125, 1129; Pub. L. 107–171, title V, §§ 5003, 5004, May 13, 2002, 116 Stat. 342.)

CITE AS: 7 USC 1929

§ 1929–1. Level of loan programs under Agricultural Credit Insurance Fund

On and after October 28, 1991, no funds in this Act or any other Act shall be available to carry out loan programs under the Agricultural Credit Insurance Fund at levels other than those provided for in advance in appropriations Acts.

(Pub. L. 102–142, title III, Oct. 28, 1991, 105 Stat. 899.)

CITE AS: 7 USC 1929-1

§ 1929a. Rural Development Insurance Fund
(a) Creation; revolving fund; rural development loans
(b) Transfer of assets and liabilities
(c) Credits in the Treasury; investments; notes, purchasing authority of the Secretary
(d) Notes, issuing authority of the Secretary; use of funds; terms and conditions, form, denominations, maturities, and interest rate of notes; notes, purchasing authority of the Secretary of the Treasury; public debt transactions
(e) Notes and security as part of Insurance Fund; collection and sale of notes and other obligations; deposit of net proceeds in Insurance Fund
(f) Deposit of loan service charges in Insurance Fund
(g) Use of Insurance Fund
The Secretary may utilize the Insurance Fund—
(1) to pay amounts to which the holder of insured notes is entitled on loans heretofore or hereafter insured accruing between the date of any payments by the borrower and the date of transmittal of any such payments to the holder. In the discretion of the Secretary, payments other than final payments need not be remitted to the holder until due or until the next agreed annual or semiannual remittance date;
(2) to pay to the holder of insured notes any deferred or defaulted installment, or upon assignment of the note to the Secretary at the Secretary’s request, the entire balance due on the loan;
(3) to purchase notes in accordance with contracts of insurance heretofore or hereafter entered into by the Secretary;
(4) to make payments in compliance with the Secretary’s obligations under contracts of guarantee entered into by him;
(5) to pay taxes, insurance, prior liens, expenses necessary to make fiscal adjustments in connection with the application and transmittal of collections or necessary to obtain credit reports on applicants or borrowers, expenses for necessary services, including construction inspections, commercial appraisals, loan servicing, consulting business advisory or other commercial and technical services, and other program services, and other expenses and advances authorized in section 1985(a) of this title in connection with insured loans. Such items may be paid in connection with guaranteed loans after or in connection with acquisition by the Secretary of such loans or security therefor after default, to an extent determined by the Secretary to be necessary to protect the interest of the Government, or in connection with grants and any other activity authorized in this chapter;
(6) to pay the difference between interest payments by borrowers and interest to which holders of insured notes are entitled under contracts of insurance heretofore or hereafter entered into by the Secretary; and
(7) to pay the Secretary’s costs of administration necessary to insure loans under the programs referred to in subsection (a) of this section, make grants under sections 1926(a) and 1932 of this title, service, and otherwise carry out such programs, including costs of the Secretary incidental to guaranteeing rural development loans under this chapter, either directly from the Insurance Fund or by transfers from the Fund to, and merger with, any appropriations for administrative expenses.
(h) Gross income; interest or other income on insured loans
(Pub. L. 87–128, title III, § 309A, as added Pub. L. 92–419, title I, § 116, Aug. 30, 1972, 86 Stat. 661; amended Pub. L. 95–113, title XV, § 1510(b), Sept. 29, 1977, 91 Stat. 1022; Pub. L. 95–334, title I, §§ 107(b), 110, Aug. 4, 1978, 92 Stat. 422, 424; Pub. L. 99–500, title III, § 381(b), Oct. 18, 1986, 100 Stat. 1783–369, and Pub. L. 99–591, title III, § 381(b), Oct. 30, 1986, 100 Stat. 3341–372; Pub. L. 99–509, title I, § 1001(b), Oct. 21, 1986, 100 Stat. 1874; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095; Pub. L. 104–127, title VI, § 661(c), title VII, §§ 741(b), 745, Apr. 4, 1996, 110 Stat. 1106, 1124, 1125; Pub. L. 115–334, title VI, § 6701(b)(1), Dec. 20, 2018, 132 Stat. 4778.)

CITE AS: 7 USC 1929a

§ 1929b. Purchase of guaranteed portions of loans; terms and conditions; exercise of authorities

The Secretary may purchase, on such terms and conditions as the Secretary deems appropriate, the guaranteed portion of any loan guaranteed under this chapter: Provided, That the Secretary may not pay for any such guaranteed portion of a loan in excess of an amount equal to the unpaid principal balance and accrued interest on the guaranteed portion of the loan. The Secretary may use for such purchases funds from the Rural Development Insurance Fund with respect to rural development loans as defined in section 1929a(a) of this title and funds from the Agricultural Credit Insurance Fund with respect to all other loans under this chapter. This authority may be exercised only if the Secretary determines that an adequate secondary market is not available in the private sector.

(Pub. L. 87–128, title III, § 309B, as added Pub. L. 95–334, title I, § 111, Aug. 4, 1978, 92 Stat. 424.)

CITE AS: 7 USC 1929b

§ 1930. Continued availability of appropriated funds for direct real estate loans to farmers and ranchers

Funds appropriated for the purpose of making direct real estate loans to farmers and ranchers under this subchapter shall remain available until expended.

(Pub. L. 87–128, title III, § 310, as added Pub. L. 91–524, title VIII, § 806(b), Nov. 30, 1970, 84 Stat. 1383.)

CITE AS: 7 USC 1930

§ 1931. Repealed. Pub. L. 104–127, title VII, § 746, Apr. 4, 1996, 110 Stat. 1125

CITE AS: 7 USC 1931

§ 1932. Assistance for rural entities
(a) Loans to private business enterprises
(1) DefinitionsIn this subsection:
(A) Aquaculture
(B) Solar energy
(2) Loan purposesThe Secretary may make and insure loans to public, private, or cooperative organizations organized for profit or nonprofit and private investment funds that invest primarily in cooperative organizations, to Indian tribes on Federal and State reservations or other federally recognized Indian tribal groups, or to individuals for the purposes of—
(A) improving, developing, or financing business, industry, and employment (including through the financing of working capital) and improving the economic and environmental climate in rural communities, including pollution abatement and control;
(B) the conservation, development, and use of water for aquaculture purposes in rural areas;
(C) reducing the reliance on nonrenewable energy resources by encouraging the development and construction of solar energy systems and other renewable energy systems (including wind energy systems and anaerobic digestors for the purpose of energy generation), including the modification of existing systems, in rural areas; and
(D) to facilitate economic opportunity for industries undergoing adjustment from terminated Federal agricultural price and income support programs or increased competition from foreign trade.
(3) Loan guarantees
(4) Maximum amount of principal
(b) Solid waste management grants
(1) In general
(2) Authorization of appropriations
(c) Rural business development grants
(1) In general
(2) Eligible entitiesThe Secretary may make grants under this subsection to—
(A) governmental entities;
(B) Indian tribes; and
(C) nonprofit entities.
(3) Eligible purposes for grantsEligible entities that receive grants under this subsection may use the grant funds for—
(A) business opportunity projects that—
(i) identify and analyze business opportunities;
(ii) identify, train, and provide technical assistance to existing or prospective rural entrepreneurs and managers;
(iii) assist in the establishment of new rural businesses and the maintenance of existing businesses, including through business support centers;
(iv) conduct regional, community, and local economic development planning and coordination, and leadership development; and
(v) establish centers for training, technology, and trade that will provide training to rural businesses in the use of interactive communications technologies to develop international trade opportunities and markets; or
(B) projects that support the development of business enterprises that finance or facilitate—
(i) the development of small and emerging private business enterprise;
(ii) the establishment, expansion, and operation of rural distance learning networks;
(iii) the development of rural learning programs that provide educational instruction or job training instruction related to potential employment or job advancement to adult students; and
(iv) the provision of technical assistance and training to rural communities for the purpose of improving passenger transportation services or facilities.
(4) Authorization of appropriations
(A) In general
(B) Allocation
(d) Joint loans or grants for private business enterprises; restrictions; system of certification for expeditious processing of requests for assistance; prior approval of grant or loan; equity investment as condition for loan commitment; issuance of certificates of beneficial ownership of notes
(1) The Secretary may participate in joint financing to facilitate development of private business enterprises in rural areas with the Economic Development Administration, the Small Business Administration, and the Department of Housing and Urban Development and other Federal and State agencies and with private and quasi-public financial institutions, through joint loans to applicants eligible under subsection (a) for the purpose of improving, developing, or financing business, industry, and employment and improving the economic and environmental climate in rural areas or through joint grants to applicants eligible under subsection (c) for such purposes, including in the case of loans or grants the development, construction, or acquisition of land, buildings, plants, equipment, access streets and roads, parking areas, utility extensions, necessary water supply and waste disposal facilities, refining, service and fees.
(2) No financial or other assistance shall be extended under any provision of this section, except for cases in which such assistance does not exceed $1,000,000 or for cases in which direct employment will not be increased by more than fifty employees, that is calculated to or is likely to result in the transfer from one area to another of any employment or business activity provided by operations of the applicant, but this limitation shall not be construed to prohibit assistance for the expansion of an existing business entity through the establishment of a new branch, affiliate, or subsidiary of such entity if the establishment of such branch, affiliate, or subsidiary will not result in an increase in unemployment in the area of original location or in any other area where such entity conducts business operations unless there is reason to believe that such branch, affiliate, or subsidiary is being established with the intention of closing down the operations of the existing business entity in the area of its original location or in any other area where it conducts such operations.
(3) No financial or other assistance shall be extended under any provision of this section, except for cases in which such assistance does not exceed $1,000,000 or for cases in which direct employment will not be increased by more than fifty employees, which is calculated to or likely to result in an increase in the production of goods, materials, or commodities, or the availability of services or facilities in the area, when there is not sufficient demand for such goods, materials, commodities, services, or facilities, to employ the efficient capacity of existing competitive commercial or industrial enterprises, unless such financial or other assistance will not have an adverse effect upon existing competitive enterprises in the area.
(4) No financial or other assistance shall be extended under any provision of this section, except for cases in which such assistance does not exceed $1,000,000 or for cases in which direct employment will not be increased by more than fifty employees, if the Secretary of Labor certifies within 30 days after the matter has been submitted to him by the Secretary of Agriculture that the provisions of paragraphs (2) and (3) of this subsection have not been complied with. The Secretary of Labor shall, in cooperation with the Secretary of Agriculture, develop a system of certification which will insure the expeditious processing of requests for assistance under this section.
(5) No grant or loan authorized to be made under this chapter shall require or be subject to the prior approval of any officer, employee, or agency of any State.
(6) No loan commitment issued under this section shall be conditioned upon the applicant investing in excess of 10 per centum in the business or industrial enterprise for which purpose the loan is to be made unless the Secretary determines there are special circumstances which necessitate an equity investment by the applicant greater than 10 per centum.
(7) No provision of law shall prohibit issuance by the Secretary of certificates evidencing beneficial ownership in a block of notes insured or guaranteed under this chapter or Title V of the Housing Act of 1949 [42 U.S.C. 1471 et seq.]; any sale by the Secretary of such certificates shall be treated as a sale of assets for the purposes of chapter 11 of title 31. Any security representing beneficial ownership in a block of notes guaranteed or insured under this chapter or Title V of the Housing Act of 1949 issued by a private entity shall be exempt from laws administered by the Securities and Exchange Commission, except sections 77q, 77v, and 77x of title 15; however, the Secretary shall require (i) that the issuer place such notes in the custody of an institution chartered by a Federal or State agency to act as trustee and (ii) that the issuer provide such periodic reports of sales as the Secretary deems necessary.
(e) Rural cooperative development grants
(1) DefinitionsIn this subsection:
(A) Nonprofit institution
(B) United States
(2) Grants
(3) Goals
(4) ApplicationAny nonprofit institution seeking a grant under paragraph (2) shall submit to the Secretary an application containing a plan for the establishment and operation by the institution of a center or centers for cooperative development. The Secretary may approve the application if the plan contains the following:
(A) A provision that substantiates that the center will effectively serve rural areas in the United States.
(B) A provision that the primary objective of the center will be to improve the economic condition of rural areas through cooperative development.
(C) A description of the activities that the center will carry out to accomplish the objective. The activities may include the following:
(i) Programs for applied research and feasibility studies that may be useful to individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center.
(ii) Programs for the collection, interpretation, and dissemination of information that may be useful to individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center.
(iii) Programs providing training and instruction for individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center.
(iv) Programs providing loans and grants to individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center.
(v) Programs providing technical assistance, research services, and advisory services to individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center.
(vi) Programs providing for the coordination of services and sharing of information among the center.1
1 So in original. Probably should be “centers.”
(D) A description of the contributions that the activities are likely to make to the improvement of the economic conditions of the rural areas for which the center will provide services.
(E) Provisions that the center, in carrying out the activities, will seek, where appropriate, the advice, participation, expertise, and assistance of representatives of business, industry, educational institutions, the Federal Government, and State and local governments.
(F) Provisions that the center will take all practicable steps to develop continuing sources of financial support for the center, particularly from sources in the private sector.
(G) Provisions for—
(i) monitoring and evaluating the activities by the nonprofit institution operating the center; and
(ii) accounting for money received by the institution under this section.
(5) Awarding grantsGrants made under paragraph (2) shall be made on a competitive basis. In making grants under paragraph (2), the Secretary shall give preference to grant applications providing for the establishment of centers for rural cooperative development that—
(A) demonstrate a proven track record in carrying out activities to promote and assist the development of cooperatively and mutually owned businesses;
(B) demonstrate previous expertise in providing technical assistance in rural areas to promote and assist the development of cooperatively and mutually owned businesses;
(C) demonstrate the ability to assist in the retention of businesses, facilitate the establishment of cooperatives and new cooperative approaches, and generate employment opportunities that will improve the economic conditions of rural areas;
(D) commit to providing technical assistance and other services to underserved and economically distressed areas in rural areas of the United States;
(E) demonstrate a commitment to—
(i) networking with and sharing the results of the efforts of the center with other cooperative development centers and other organizations involved in rural economic development efforts; and
(ii) developing multiorganization and multistate approaches to addressing the economic development and cooperative needs of rural areas; and
(F) commit to providing a 25 percent matching contribution with private funds and in-kind contributions, except that the Secretary shall not require non-Federal financial support in an amount that is greater than 5 percent in the case of a 1994 institution (as defined in section 532 of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note; Public Law 103–382)).
(6) Grant period
(A) In general
(B) Multiyear grants
(7) Authority to extend grant period
(8) Technical assistance to prevent excessive unemployment or underemployment
(9) Grants to defray administrative costs
(10) Cooperative research program
(11) Addressing needs of minority communities
(A) Definition of socially disadvantaged group
(B) Reservation of funds
(i) In generalIf the total amount appropriated under paragraph (13) for a fiscal year exceeds $7,500,000, the Secretary shall reserve an amount equal to 20 percent of the total amount appropriated for grants for cooperative development centers, individual cooperatives, or groups of cooperatives—(I) that serve socially disadvantaged groups; and(II) a majority of the boards of directors or governing boards of which are comprised of individuals who are members of socially disadvantaged groups.
(ii) Insufficient applications
(12) Interagency working group
(13) Authorization of appropriations
(f) Repealed. Pub. L. 115–334, title VI, § 6601(a)(1)(B), Dec. 20, 2018, 132 Stat. 4775
(g) Business and industry direct and guaranteed loans
(1) Definition of business and industry loan
(2) Loan guarantees for the purchase of cooperative stock
(A) In general
(B) Processing contracts during initial period
(C) Financial information
(3) Loans to cooperatives
(A) Eligibility
(i) In general
(ii) Equity
(B) RefinancingA cooperative organization that is eligible for a business and industry loan shall be eligible to refinance an existing business and industry loan with a lender if—
(i) the cooperative organization—(I) is current and performing with respect to the existing loan; and(II) is not, and has not been, in payment default, or the collateral of which has not been converted, with respect to the existing loan; and
(ii) there is adequate security or full collateral for the refinanced loan.
(4) Loan appraisals
(5) Fees
(6) Loan guarantees in nonrural areas
(A) In generalThe Secretary may guarantee a business and industry loan to a cooperative organization for a facility that is not located in a rural area if—
(i) the primary purpose of the loan guarantee is for a facility to provide value-added processing for agricultural producers that are located within 80 miles of the facility;
(ii) the applicant demonstrates to the Secretary that the primary benefit of the loan guarantee will be to provide employment for residents of a rural area; and
(iii) the total amount of business and industry loans guaranteed for a fiscal year under this paragraph does not exceed 10 percent of the business and industry loans guaranteed for the fiscal year under subsection (a)(2)(A).
(B) Principal amounts
(7) Intangible assets
(A) In general
(B) Accounts receivable
(8) Limitations on loan guarantees for cooperative organizations
(A) Principal amount
(i) In general
(ii) UseTo be eligible for a guarantee under this subsection for a business and industry loan made to a cooperative organization, the principal amount of the any such loan in excess of $25,000,000 shall be used to carry out a project that—(I)(aa) is in a rural area; and(bb) provides for the value-added processing of agricultural commodities; or(II) significantly benefits 1 or more entities eligible for assistance for the purposes described in subsection (a)(1), as determined by the Secretary.
(B) ApplicationsIf a cooperative organization submits an application for a guarantee under this subsection of a business and industry loan with a principal amount that is in excess of $25,000,000, the Secretary—
(i) shall review and, if appropriate, approve the application; and
(ii) may not delegate the approval authority.
(C) Maximum amount
(9) Locally or regionally produced agricultural food products
(A) DefinitionsIn this paragraph:
(i) Locally or regionally produced agricultural food productThe term “locally or regionally produced agricultural food product” means any agricultural food product that is raised, produced, and distributed in—(I) the locality or region in which the final product is marketed, so that the total distance that the product is transported is less than 400 miles from the origin of the product; or(II) the State in which the product is produced.
(ii) Underserved communityThe term “underserved community” means a community (including an urban or rural community and an Indian tribal community) that has, as determined by the Secretary—(I) limited access to affordable, healthy foods, including fresh fruits and vegetables, in grocery retail stores or farmer-to-consumer direct markets; and(II) a high rate of hunger or food insecurity or a high poverty rate.
(B) Loan and loan guarantee program
(i) In general
(ii) Requirement
(iii) Priority
(iv) Reservation of funds(I) In general(II) Availability of funds
(h) Loan guarantees for certain loans
(i) Appropriate technology transfer for rural areas program
(1) Definition of national nonprofit agricultural assistance institutionIn this subsection, the term “national nonprofit agricultural assistance institution” means an organization that—
(A) is described in section 501(c)(3) of title 26 and exempt from taxation under 2
2 So in original. The word “section” probably should appear.
501(a) of that title;
(B) has staff and offices in multiple regions of the United States;
(C) has experience and expertise in operating national agriculture technical assistance programs;
(D) expands markets for the agricultural commodities produced by producers through the use of practices that enhance the environment, natural resource base, and quality of life; and
(E) improves the economic viability of agricultural operations.
(2) EstablishmentThe Secretary shall establish a national appropriate technology transfer for rural areas program to assist agricultural producers that are seeking information to—
(A) reduce input costs;
(B) conserve energy resources;
(C) diversify operations through new energy crops and energy generation facilities; and
(D) expand markets for agricultural commodities produced by the producers by using practices that enhance the environment, natural resource base, and quality of life.
(3) Implementation
(A) In general
(B) Grant amount
(4) Authorization of appropriations
(j) Rural economic area partnership zones
(Pub. L. 87–128, title III, § 310B, as added Pub. L. 92–419, title I, § 118(a), Aug. 30, 1972, 86 Stat. 663; amended Pub. L. 91–524, title VIII, § 817, as added Pub. L. 93–86, § 1(27)(B), Aug. 10, 1973, 87 Stat. 241; Pub. L. 95–113, title XV, § 1503(b), Sept. 29, 1977, 91 Stat. 1021; Pub. L. 95–334, title I, § 112, Aug. 4, 1978, 92 Stat. 424; Pub. L. 96–358, § 5, Sept. 25, 1980, 94 Stat. 1187; Pub. L. 96–438, § 1(2), Oct. 13, 1980, 94 Stat. 1871; Pub. L. 99–409, § 2, Aug. 28, 1986, 100 Stat. 923; Pub. L. 100–203, title I, § 1504, Dec. 22, 1987, 101 Stat. 1330–28; Pub. L. 101–624, title XXIII, §§ 2325, 2337, 2347, formerly 2347(a), 2386, 2388(b), (c), Nov. 28, 1990, 104 Stat. 4013, 4022, 4034, 4051, 4052; Pub. L. 102–237, title VII, § 701(c), (h)(1)(C), (D), Dec. 13, 1991, 105 Stat. 1879, 1880; Pub. L. 102–552, title V, § 516(d), Oct. 28, 1992, 106 Stat. 4137; Pub. L. 102–554, § 6, Oct. 28, 1992, 106 Stat. 4144; Pub. L. 104–127, title VI, §§ 635(b), 661(d), title VII, §§ 705(1), 747(a), 759B, Apr. 4, 1996, 110 Stat. 1093, 1107, 1112, 1125, 1138; Pub. L. 104–180, title VII, § 731, Aug. 6, 1996, 110 Stat. 1600; Pub. L. 107–171, title VI, §§ 6007(b), 6013–6017, May 13, 2002, 116 Stat. 355, 358, 359; Pub. L. 110–234, title VI, §§ 6012(a), (b)(2), 6013–6017, May 22, 2008, 122 Stat. 1164–1169; Pub. L. 110–246, § 4(a), title VI, §§ 6012(a), (b)(2), 6013–6017, June 18, 2008, 122 Stat. 1664, 1925, 1927–1931; Pub. L. 113–79, title VI, §§ 6010(a), (b), 6011, 6012(a), 6013–6016, Feb. 7, 2014, 128 Stat. 843–845; Pub. L. 113–188, title I, § 101(c), Nov. 26, 2014, 128 Stat. 2017; Pub. L. 115–334, title VI, §§ 6410–6415, 6601(a)(1)(B), 6701(c), (d)(1), Dec. 20, 2018, 132 Stat. 4762, 4775, 4778.)

CITE AS: 7 USC 1932

§ 1933. Guaranteed rural housing loans; Hawaiian home lands
(a) Rural Housing Loans which (1) are guaranteed by the Secretary under section 517(a)(2) 1
1 See References in Text note below.
of the Housing Act of 1949 [42 U.S.C. 1487(a)(2)], (2) are made by other lenders approved by the Secretary to provide dwellings in rural areas for the applicants’ own use, and (3) bear interest and other charges at rates not above the maximum rates prescribed by the Secretary of Housing and Urban Development for loans made by private lenders for similar purposes and guaranteed by the Secretary of Housing and Urban Development under the National Housing Act [12 U.S.C. 1701 et seq.] or superseding legislation shall not be subject to sections 501(c) and 502(b)(3) of the Housing Act of 1949 [42 U.S.C. 1471(c) and 1472(b)(3)].
(b) For the purposes of title V of the Housing Act of 1949 [42 U.S.C. 1471 et seq.] or this chapter, a guarantee of payment given under the color of law by the Department of Hawaiian Home Lands (or its successor in function) shall be found by the Secretary reasonably to assure repayment of any indebtedness so guaranteed.
(Pub. L. 87–128, title III, § 310C, as added Pub. L. 92–419, title I, § 119, Aug. 30, 1972, 86 Stat. 664; amended Pub. L. 101–624, title XVIII, § 1804, Nov. 28, 1990, 104 Stat. 3819.)

CITE AS: 7 USC 1933

§ 1934. Low-income farm ownership loan program; eligibility; repayment requirements
(a) The Secretary is authorized to make and insure loans for any of the purposes referred to in section 1923(a) of this title, or paragraphs (1) through (5) of section 1924(a) of this title, to farmers and ranchers in the United States who (1) are citizens of the United States, (2) meet the requirements of paragraphs (2) through (4) of section 1922 of this title, (3) are unable to obtain sufficient credit under section 1922 of this title to finance their actual needs, (4) are owners or operators of small or family farms (including new owners or operators), (5) are farmers or ranchers with a low income, and (6) demonstrate a need to maximize their income from farming or ranching operations. The Secretary is also authorized to make such loans to any farm cooperative or private domestic corporation or partnership, or such other legal entities as the Secretary considers appropriate, that is controlled by farmers and ranchers and engaged primarily and directly in farming or ranching in the United States if all of its members, stockholders, partners, or owners, as applicable, are citizens of the United States and the entity and all such members, stockholders, partners, or owners meet the requirements of paragraphs (2) through (6) of the preceding sentence.
(b) Each loan made or insured under this section shall be repayable in such installments as the Secretary determines will provide for reduced payments during the initial repayment period of the loan and larger payments during the remainder of the repayment period of the loan.
(Pub. L. 87–128, title III, § 310D, as added Pub. L. 95–334, title I, § 113, Aug. 4, 1978, 92 Stat. 424; amended Pub. L. 101–624, title XVIII, § 1802(b), Nov. 28, 1990, 104 Stat. 3818; Pub. L. 102–552, title V, § 516(e)(1), Oct. 28, 1992, 106 Stat. 4137; Pub. L. 104–127, title VI, § 661(e), Apr. 4, 1996, 110 Stat. 1107; Pub. L. 113–79, title V, § 5001(c)(2), Feb. 7, 2014, 128 Stat. 833.)

CITE AS: 7 USC 1934

§ 1935. Down payment loan program
(a) In general
(1) Establishment
(2) Administration
(b) Loan terms
(1) PrincipalEach loan made under this section shall be in an amount that does not exceed 45 percent of the least of—
(A) the purchase price of the farm or ranch to be acquired;
(B) the appraised value of the farm or ranch to be acquired; or
(C) $667,000.
(2) Interest rateThe interest rate on any loan made by the Secretary under this section shall be a rate equal to the greater of—
(A) the difference obtained by subtracting 4 percent from the interest rate for farm ownership loans under this subchapter; or
(B) 1.5 percent.
(3) Duration
(4) Repayment
(5) Nature of retained security interestThe Secretary shall retain an interest in each farm or ranch acquired with a loan made under this section that shall—
(A) be secured by the farm or ranch;
(B) be junior only to such interests in the farm or ranch as may be conveyed at the time of acquisition to the person (including a lender) from whom the borrower obtained a loan used to acquire the farm or ranch; and
(C) require the borrower to obtain the permission of the Secretary before the borrower may grant an additional security interest in the farm or ranch.
(c) Limitations
(1) Borrowers required to make minimum down payment
(2) Prohibited types of financingThe Secretary shall not make a loan under this section with respect to a farm or ranch if the farm or ranch is to be acquired with other financing that contains any of the following conditions:
(A) The financing is to be amortized over a period of less than 30 years.
(B) A balloon payment will be due on the financing during the 20-year period beginning on the date the loan is to be made by the Secretary.
(d) AdministrationIn carrying out this section, the Secretary shall, to the maximum extent practicable—
(1) facilitate the transfer of farms and ranches from retiring farmers and ranchers to persons eligible for insured loans under this subchapter;
(2) make efforts to widely publicize the availability of loans under this section among—
(A) potentially eligible farmers or ranchers;
(B) retiring farmers and ranchers; and
(C) applicants for farm ownership loans under this subchapter;
(3) encourage retiring farmers and ranchers to assist in the sale of their farms and ranches to eligible farmers or ranchers by providing seller financing;
(4) coordinate the loan program established by this section with State programs that provide farm ownership or operating loans for—
(A) beginning farmers or ranchers;
(B) socially disadvantaged farmers or ranchers, as defined in section 2003(e) of this title; or
(C) veteran farmers or ranchers, as defined in section 2279(a) of this title; and; and 1
1 So in original.
(5) establish annual performance goals to promote the use of the down payment loan program and other joint financing arrangements as the preferred choice for direct real estate loans made by any lender to an eligible farmer or rancher.
(e) Definition of eligible farmer or rancherIn this section, the term “eligible farmer or rancher” means—
(1) a qualified beginning farmer or rancher;
(2) a socially disadvantaged farmer or rancher, as defined in section 2003(e) of this title; and
(3) a veteran farmer or rancher, as defined in section 2279(a) of this title.
(Pub. L. 87–128, title III, § 310E, as added Pub. L. 102–554, § 7(a), Oct. 28, 1992, 106 Stat. 4144; amended Pub. L. 107–171, title V, § 5005, May 13, 2002, 116 Stat. 342; Pub. L. 110–234, title V, § 5004, May 22, 2008, 122 Stat. 1144; Pub. L. 110–246, § 4(a), title V, § 5004, June 18, 2008, 122 Stat. 1664, 1905; Pub. L. 113–79, title V, § 5005, Feb. 7, 2014, 128 Stat. 834; Pub. L. 115–334, title XII, § 12306(c), Dec. 20, 2018, 132 Stat. 4969.)

CITE AS: 7 USC 1935

§ 1936. Beginning farmer or rancher and socially disadvantaged farmer or rancher contract land sales program
(a) In general
(b) EligibilityIn order to be eligible for a loan guarantee under subsection (a)—
(1) the qualified beginning farmer or rancher or socially disadvantaged farmer or rancher shall—
(A) on the date the contract land sale that is subject of the loan is complete, own and operate the farm or ranch that is the subject of the contract land sale;
(B) have a credit history that—
(i) includes a record of satisfactory debt repayment, as determined by the Secretary; and
(ii) is acceptable to the Secretary; and
(C) demonstrate to the Secretary that the farmer or rancher, as the case may be, is unable to obtain sufficient credit without a guarantee to finance any actual need of the farmer or rancher, as the case may be, at a reasonable rate or term; and
(2) the loan shall meet applicable underwriting criteria, as determined by the Secretary.
(c) Limitations
(1) Down payment
(2) Maximum purchase price
(d) Period of guarantee
(e) Guarantee plan
(1) Selection of planA private seller of a farm or ranch who makes a loan that is guaranteed by the Secretary under subsection (a) may select—
(A) a prompt payment guarantee plan, which shall cover—
(i) 3 amortized annual installments; or
(ii) an amount equal to 3 annual installments (including an amount equal to the total cost of any tax and insurance incurred during the period covered by the annual installments); or
(B) a standard guarantee plan, which shall cover an amount equal to 90 percent of the outstanding principal of the loan.
(2) Eligiblity 1
1 So in original. Probably should be “Eligibility”.
for standard guarantee planIn order for a private seller to be eligible for a standard guarantee plan referred to in paragraph (1)(B), the private seller shall—
(A) secure a commercial lending institution or similar entity, as determined by the Secretary, to serve as an escrow agent; or
(B) in cooperation with the farmer or rancher, use an appropriate alternate arrangement, as determined by the Secretary.
(f) Transition from pilot program
(1) In general
(2) Limitation
(Pub. L. 87–128, title III, § 310F, as added Pub. L. 107–171, title V, § 5006, May 13, 2002, 116 Stat. 342; amended Pub. L. 110–234, title V, § 5005, May 22, 2008, 122 Stat. 1145; Pub. L. 110–246, § 4(a), title V, § 5005, June 18, 2008, 122 Stat. 1664, 1906.)

CITE AS: 7 USC 1936

§ 1936a. Use of rural development loans and grants for other purposes
If, after making a loan or a grant described in section 2009d(d) of this title, the Secretary determines that the circumstances under which the loan or grant was made have sufficiently changed to make the project or activity for which the loan or grant was made available no longer appropriate, the Secretary may allow the loan borrower or grant recipient to use property (real and personal) purchased or improved with the loan or grant funds, or proceeds from the sale of property (real and personal) purchased with such funds, for another project or activity that (as determined by the Secretary)—
(1) will be carried out in the same area as the original project or activity;
(2) meets the criteria for a loan or a grant described in section 2009d(d) of this title; and
(3) satisfies such additional requirements as are established by the Secretary.
(Pub. L. 87–128, title III, § 310G, as added Pub. L. 107–171, title VI, § 6018, May 13, 2002, 116 Stat. 361.)

CITE AS: 7 USC 1936a

§ 1936b. Intermediary relending program
(a) In general
(b) Eligible entitiesEntities eligible for loans and loan guarantees described in subsection (a) are—
(1) public agencies;
(2) Indian tribes;
(3) cooperatives; and
(4) nonprofit corporations.
(c) Eligible purposesThe proceeds from loans made or guaranteed by the Secretary pursuant to subsection (a) may be relent by eligible entities for projects that—
(1) predominately serve communities in rural areas; and
(2) as determined by the Secretary—
(A) promote community development;
(B) establish new businesses;
(C) establish and support microlending programs; and
(D) create or retain employment opportunities.
(d) Limitation
(e) Limitation on loan amountsThe maximum amount of a loan by an eligible entity described in subsection (b) to individuals and entities for a project under subsection (c), including the unpaid balance of any existing loans, shall be the lesser of—
(1) $400,000; and
(2) 50 percent of the loan to the eligible entity under subsection (a).
(f) Applications
(1) In general
(2) EvaluationIn evaluating applications submitted under paragraph (1), the Secretary shall—
(A)
(i) take into consideration the previous performance of an eligible entity in carrying out projects under subsection (c); and
(ii) in the case of satisfactory performance under clause (i), require the eligible entity to contribute less equity for subsequent loans without modifying the priority given to subsequent applications; and
(B) in assigning priorities to applications, require an eligible entity to demonstrate that it has a governing or advisory board made up of business, civic, and community leaders who are representative of the communities of the service area, without limitation to the size of the service area.
(g) Return of equityThe Secretary shall establish a schedule that is consistent with the amortization schedules of the portfolio of loans made or guaranteed under subsection (a) for the return of any equity contribution made under this section by an eligible entity described in subsection (b), if the eligible entity is—
(1) current on all principal and interest payments; and
(2) in compliance with loan covenants.
(h) Regulations
(i) Authorization of appropriations
(Pub. L. 87–128, title III, § 310H, as added Pub. L. 113–79, title VI, § 6017(a), Feb. 7, 2014, 128 Stat. 845; amended Pub. L. 115–334, title VI, § 6416, Dec. 20, 2018, 132 Stat. 4762.)

CITE AS: 7 USC 1936b

§ 1936c. Relending program to resolve ownership and succession on farmland
(a) In general
(b) Eligible entitiesEntities eligible for loans described in subsection (a) are cooperatives, credit unions, and nonprofit organizations with—
(1) certification under section 1805.201 of title 12, Code of Federal Regulations (or successor regulations), to operate as a lender;
(2) experience assisting socially disadvantaged farmers and ranchers (as defined in subsection (a) of section 2279 of this title) or limited resource or new and beginning farmers and ranchers, rural businesses, cooperatives, or credit unions, including experience in making and servicing agricultural and commercial loans; and
(3) the ability to provide adequate assurance of the repayment of a loan.
(c) Eligible purposes
(d) PreferenceIn making loans under subsection (a), the Secretary shall give preference to eligible entities—
(1) with not less than 10 years of experience serving socially disadvantaged farmers and ranchers; and
(2) in States that have adopted a statute consisting of an enactment or adoption of the Uniform Partition of Heirs Property Act, as approved and recommended for enactment in all States by the National Conference of Commissioners on Uniform State Laws in 2010, that relend to owners of heirs property (as defined in that Act).
(e) Loan terms and conditionsThe following terms and conditions shall apply to loans made under this section:
(1) The interest rate at which intermediaries may borrow funds under this section shall be determined by the Secretary.
(2) The rates, terms, and payment structure for borrowers to which intermediaries lend shall be—
(A) determined by the intermediary in an amount sufficient to cover the cost of operating and sustaining the revolving loan fund; and
(B) clearly and publicly disclosed to qualified ultimate borrowers.
(3) Borrowers to which intermediaries lend shall be—
(A) required to complete a succession plan as a condition of the loan; and
(B) be offered the opportunity to borrow sufficient funds to cover costs associated with the succession plan under subparagraph (A) and other associated legal and closing costs.
(f) Report
(g) Authorization of appropriations
(Pub. L. 87–128, title III, § 310I, as added Pub. L. 115–334, title V, § 5104, Dec. 20, 2018, 132 Stat. 4669.)

CITE AS: 7 USC 1936c