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

Summary

The Secretary can make a loan to pay for a farmhouse and buildings when three things are true: the farm’s and the applicant’s other income are too low now to make full loan payments, the farm’s income can reasonably be raised within five years by improving or changing how the farm is run, and the applicant has a realistic plan to make those improvements so income will be enough to repay the loan. The Secretary can also agree to credit some annual payments for up to five years. Those credits may equal up to the yearly interest plus 50% of that year’s principal due, but only if the borrower really cannot make the planned payments and works on the improvement plan. Except under title 11, those credit agreements can’t be transferred to someone else without the Secretary’s written OK. The Secretary may cancel the agreement if the farm is sold or if a new lien is put on the farm after the Secretary’s lien. The Secretary can refuse to remove the lien unless the borrower pays the full original principal plus accrued interest, minus any cash payments already made, when releasing the lien would give the benefits to someone not eligible.