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Title 42, The Public Health and WelfareRelease 119-110

§1475 Loan Payment Moratorium and Foreclosure Procedures

Title 42 › CHAPTER 8A — SLUM CLEARANCE, URBAN RENEWAL, AND FARM HOUSING › SUBCHAPTER III — FARM HOUSING › § 1475

Last updated Sep 22, 2026|Official source

Summary

The Secretary can pause a borrower's payments of interest and principal on a loan while the loan is still active. The borrower must show that things beyond their control keep them from paying and that paying would seriously hurt their basic living. In extreme hardship, the Secretary can cancel interest that would be due during the pause. If a foreclosure happens after a pause, the borrower cannot be sued for any remaining debt if they tried in good faith to pay. When the Secretary forecloses, he must use the State’s foreclosure rules if those rules are better for the borrower than the rules he would normally use. That choice depends on having any extra money Congress approves if additional funds are needed.

Full Legal Text

Title 42, §1475

The Public Health and Welfare, Source: USLM XML via OLRC

(a)Moratorium
During any time that any such loan is outstanding, the Secretary is authorized under regulations to be prescribed by him to grant a moratorium upon the payment of interest and principal on such loan for so long a period as he deems necessary, upon a showing by the borrower that due to circumstances beyond his control, he is unable to continue making payments of such principal and interest when due without unduly impairing his standard of living. In cases of extreme hardship under the foregoing circumstances, the Secretary is further authorized to cancel interest due and payable on such loans during the moratorium. Should any foreclosure of such a mortgage securing such a loan upon which a moratorium has been granted occur, no deficiency judgment shall be taken against the mortgagor if he shall have faithfully tried to meet his obligation.
(b)Foreclosure procedures
In foreclosing on any mortgage held by the Secretary under this subchapter, the Secretary shall follow the foreclosure procedures of the State in which the property involved is located to the extent such procedures are more favorable to the borrower than the foreclosure procedures that would otherwise be followed by the Secretary. This subsection shall be subject to the availability of amounts approved in appropriations Acts, to the extent additional budget authority is necessary to carry out this subsection.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1990—Pub. L. 101–625 amended section catchline generally, designated existing provisions as subsec. (a) and inserted heading, and added subsec. (b).

Reference

Citations & Metadata

Citation

42 U.S.C. § 1475

Title 42, The Public Health and Welfare

Last Updated

Sep 22, 2026

Release point: 119-110