§1473 Loans for housing and buildings on potentially adequate farms; conditions and terms

Summary

The Secretary can make a loan to put up decent housing and farm buildings on a farm if three things are true. First, the farmer’s income from the farm and other sources is too low to reasonably make the usual yearly loan payments and pay the loan off in the normal time. Second, the farmer’s income can probably be raised within five years by improving or enlarging the farm or changing farming methods. Third, the farmer has a plan to do those improvements that the Secretary believes will raise farm income within five years so the farmer can then make the needed payments, after counting any cash payments and the Secretary’s help. The Secretary may also agree to give yearly credits on the loan for up to five years. Each year the credit can’t be more than that year’s interest plus 50 percent of that year’s principal payments. The credits only apply if the farmer really cannot make the planned payments and actually works on the improvement plan. Except as allowed under title 11, the credit deal can’t be transferred to someone else without the Secretary’s written OK. The Secretary may cancel the deal if the farm is sold or if a new lien is placed on the farm after the Secretary’s lien, or refuse to remove the Secretary’s lien unless the borrower pays the full original principal plus accrued interest minus any cash payments when removing the lien would let someone not eligible get the benefit.