§912 Extension of time for repayment of loans

Summary

The Secretary can delay when a borrower must pay interest or principal on loans made under this chapter. Loans made under sections 904 or 922 cannot be delayed more than five years after the payment became due. Under limits set in annual spending laws, the Secretary must let borrowers defer payments in certain cases, but a deferment cannot be given just because the Secretary finds the borrower has financial hardship. If a deferment is used to help finance local businesses, the deferred amount is paid back in equal, interest-free installments over 60 months. If it is used for other community, business, or economic development work, the deferred amount is paid back in equal, interest-free installments over 120 months. A borrower may defer only up to the amount they invest and not more than 50 percent of a project’s total cost. For fiscal years 1990–1993 deferments each year cannot exceed 3 percent of all borrowers’ payments due; in later years they cannot exceed 5 percent. At the time of deferment the borrower must put the deferred amount into a cushion-of-credit account and keep that balance at least equal to the unpaid deferred amount. The Secretary must try to allow the full amount of deferments each year. The Secretary must also allow deferments on direct loans so borrowers can lend to customers for energy audits and for installing energy-saving equipment that lowers electric demand. Those deferments cannot exceed the loans’ principal and interest to the customer and cannot run more than 60 months.