§1473 Loans for Housing and Buildings on Potentially Adequate Farms; Conditions and Terms

Summary

The Secretary may make a loan to pay for farm housing and buildings when three things are true. First, the borrower’s income from the farm and other sources is too low to be expected to make yearly payments that would repay the loan within the time the Secretary sets. Second, the borrower’s farm income can reasonably be raised within not to exceed five years by improving or enlarging the farm or changing farm methods. Third, the borrower has a plan for those improvements and is likely to carry it out so income will rise within not to exceed five years to allow loan repayment, after counting cash payments and any credits the Secretary gives. The loan follows the rules in section 1472. The Secretary may also agree to give yearly credits on the borrower’s debt during the five-year period. Those credits can be no more than the yearly interest plus 50 percent of the principal payments in any installment year up to and including the fifth installment year. The credits are allowed only if the borrower’s income is really insufficient and the borrower works on the plan with due diligence. Except as provided in title 11, the credit agreement cannot be assigned or used by someone else without the Secretary’s written consent. The Secretary can cancel the agreement if the farm is sold or a new lien is placed after the Secretary’s lien, or refuse to release the lien except for full cash payment of the original principal plus accrued interest minus actual cash payments when release would let someone not eligible get the benefits.