§936 — Title 7 Agriculture | U.S. Code

Summary

The Secretary can help borrowers by fully guaranteeing loans made by the National Rural Utilities Cooperative Finance Corporation or other lawful lenders. The Secretary can also rearrange or lower liens or mortgages held in the Secretary’s fund, or use a mix of guarantees and lien changes. Telephone loan borrowers must apply to get this help. No fees may be charged for lien accommodations or subordination. Interest on guaranteed loans is whatever the borrower and lender agree to, and these actions can happen at the same time as an insured loan. The total amount guaranteed is limited only by what Congress allows. Guaranteed amounts are not counted in federal budget totals and are exempt from general limits on spending and net lending. A guaranteed loan is one that a lender makes, holds, and services while the Secretary provides the guarantee. The loan and its guarantee can be transferred only as the guarantee contract permits.

Title 7, §936

Agriculture — Source: USLM XML via OLRC

The Secretary may provide financial assistance to borrowers for purposes provided in this chapter by guaranteeing loans, in the full amount thereof, made by the National Rural Utilities Cooperative Finance Corporation and any other legally organized lending agency, or by accommodating or subordinating liens or mortgages in the fund held by the Secretary as owner or as trustee or custodian for purchases of notes from the fund, or by any combination of such guarantee, accommodation, or subordination. The Secretary shall not provide such assistance to any borrower of a telephone loan under this chapter unless the borrower specifically applies for such assistance. No fees or charges shall be assessed for any such accommodation or subordination. Guaranteed loans shall bear interest at the rate agreed upon by the borrower and the lender. Guaranteed loans, and accommodation and subordination of liens or mortgages, may be made concurrently with an insured loan. The amount of guaranteed loans shall be subject only to such limitations as to amounts as may be authorized from time to time by the Congress of the United States: Provided, That any amounts guaranteed hereunder shall not be included in the totals of the budget of the United States Government and shall be exempt from any general limitation imposed by statute on expenditures and net lending (budget outlays) of the United States. As used in this subchapter a guaranteed loan is one which is initially made, held, and serviced by a legally organized lending agency and which is guaranteed by the Secretary hereunder. A guaranteed loan, including the related guarantee, may be assigned to the extent provided in the contract of guarantee executed by the Secretary under this subchapter; the assignability of such loan and guarantee shall be governed exclusively by said contract of guarantee.

Notes & Related Subsidiaries

Editorial Notes

Codification Pub. L. 110–234 and Pub. L. 110–246 made identical

Amendments

to this section. The

Amendments

by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246.

Amendments

2018—Pub. L. 115–334 substituted “the National Rural Utilities Cooperative Finance Corporation” for “the Rural Telephone Bank, National Rural Utilities Cooperative Finance Corporation,”. 2008—Pub. L. 110–246, § 6102(b), substituted “No fees or charges shall be assessed for any such accommodation or subordination.” for “No fees or charges shall be assessed for any such guarantee, accommodation, or subordination. With respect to guarantees issued by the Secretary under this section, on the request of the borrower of any such loan so guaranteed, the loan shall be made by the Federal Financing Bank and at a rate of interest that is not more than the rate of interest applicable to other similar loans then being made or purchased by the Bank.” 1994—Pub. L. 103–354 substituted “Secretary” for “Administrator” wherever appearing. 1990—Pub. L. 101–624 inserted provisions prohibiting Administrator from providing assistance to telephone borrower unless borrower specifically applies therefor. 1981—Pub. L. 97–35 inserted provisions relating to loans made by Federal Financing Bank with respect to guarantees issued under this section, and substituted “an insured loan” for “a loan insured at the standard rate”. 1975—Pub. L. 94–124 authorized assignment of guaranteed loans and their related guarantees and inserted “initially” before “made, held, and serviced” in provision defining guaranteed loans as that term is used in this subchapter.

Statutory Notes and Related Subsidiaries

Effective Date

of 2008 AmendmentAmendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an

Effective Date

note under section 8701 of this title.

Effective Date

Section effective

May 11, 1973, see section 12 of Pub. L. 93–32, set out as a note under section 930 of this title. Prepayment of Loans Pub. L. 99–349, title I,

July 2, 1986, 100 Stat. 713, related to the prepayment of loans made by the Federal Financing Bank, and guaranteed by the Administrator of the Rural Electrification Administration, prior to repeal by Pub. L. 99–509, title I, § 1011(b), Oct. 21, 1986, 100 Stat. 1876.

§936 Guaranteed loans; accommodations and subordination of liens; interest rates; assignability of guaranteed loans and related guarantees

Summary

Title 7, §936

Notes & Related Subsidiaries

Editorial Notes

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Statutory Notes and Related Subsidiaries

Effective Date

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