PRIA Logo™
Title 25, IndiansRelease 119-110

§5142 Reduction of Unpaid Principal

Title 25 › CHAPTER 45 — PROTECTION OF INDIANS AND CONSERVATION OF RESOURCES › § 5142

Last updated Sep 23, 2026|Official source

Summary

The Agriculture Secretary can reduce the unpaid principal on certain loans to the land’s current fair market value if three things are true: the land’s value dropped by at least 25% since purchase, the borrower owned the land for at least 5 years, and the Interior Secretary finds the borrower does not have enough income to both repay the loan and run normal tribal government services. An independent qualified fee appraiser, chosen by both the borrower and the Agriculture Secretary, must set the value and the borrower pays for the appraisal. Decisions can be appealed under the Consolidated Farm and Rural Development Act. If a loan is reduced, the borrower cannot ask for another reduction on that loan for 5 years.

Full Legal Text

Title 25, §5142

Indians, Source: USLM XML via OLRC

(a)In general
The Secretary of Agriculture may, on the application of the borrower of a loan or loans made under sections 5136 to 5143 of this title, reduce the unpaid principal balance of such loan or loans to the current fair market value of the land purchased with the proceeds of the loan or loans if—
(1)the fair market value of the land has declined by at least 25 percent since such land was purchased by the borrower;
(2)the land has been held by the borrower for a period of at least 5 years; and
(3)the Secretary of the Interior finds that the borrower has insufficient income to both repay the loan or loans and provide normal tribal governmental services.
(b)Fair market value
(1)Appraisal
Current fair market value under subsection (a) of this section shall be determined through an appraisal by an independent qualified fee appraiser, selected by mutual agreement between the borrower and the Secretary of Agriculture.
(2)Costs
The cost of appraisals undertaken under paragraph (1) shall be paid by the borrower.
(c)Appeals
Decisions of the Secretary of Agriculture under this section shall be appealable in accordance with the provisions of section 333B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983b).
(d)Future applications
A borrower that had a loan or loans reduced under this section shall not submit an application for another reduction on such loan or loans for a period of 5 years after the initial reduction.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 333B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983b), referred to in subsec. (c), probably means section 333B of Pub. L. 87–128, as added by Pub. L. 99–198, title XIII, § 1313(a), Dec. 23, 1985, 99 Stat. 1525, and amended, which related to appeals from adverse decisions under the Act, prior to repeal by Pub. L. 103–354, title II, § 281(c), Oct. 13, 1994, 108 Stat. 3233, and enactment of a new section 333B of Pub. L. 87–128 by Pub. L. 110–234, title V, § 5301,
May 22, 2008, 122 Stat. 1147, and Pub. L. 110–246, title V, § 5301,
June 18, 2008, 122 Stat. 1908, which established a beginning farmers’ pilot program. Codification Another section 6 of Pub. L. 91–229 was added by Pub. L. 101–624, title XVIII, § 1854(b), Nov. 28, 1990, 104 Stat. 3837, and is classified to section 5143 of this title. Section was formerly classified to section 493 of this title prior to editorial reclassification and renumbering as this section.

Reference

Citations & Metadata

Citation

25 U.S.C. § 5142

Title 25, Indians

Last Updated

Sep 23, 2026

Release point: 119-110