42 U.S.C. § 1480: Administrative powers of…

Summary

The Secretary can do many things to run the program under this subchapter. The Secretary may make small contracts for services or supplies without following the usual federal contracting rules when the total is under $300. The Secretary may enter into agreements about who gets paid first on debts, take over others’ rights to collect, or make other similar deals. The Secretary can settle, lower, or write off debts, change or release loan terms, and even free borrowers from personal liability when needed. The Secretary must collect loans and other claims and can take cases to court. The Attorney General supervises most litigation and U.S. attorneys usually represent the government. For cases under section 1472, the Secretary may use U.S. attorneys, the Department of Agriculture’s General Counsel, or private attorneys hired under contract if they are competent, cost-effective, and speed up housing use or protect housing quality. The Secretary must report each year to Congress about those private lawyer contracts and savings. The Secretary may buy, fix, operate, lease, sell, or otherwise handle property taken in foreclosure. Sales must ensure the property meets decent, safe, and sanitary standards or that the buyer will meet them. The Secretary can transfer inventory properties to organizations for low-income housing, with mortgages up to 50 years (under section 1485) or 33 years (under section 1484), sometimes at reduced prices for very low-income housing. The Secretary can keep processing loan applications received before an area lost its “rural” status and provide help for repairs, transfers, and assumptions as if the area were still rural. The Secretary may use certain debt-collection powers, hire fee inspectors and appraisers (charging their cost to loans or grants), and make rules needed to run the program.

Title 42, §1480

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In carrying out the provisions of this subchapter, the Secretary shall have the power to—

(a)Service and supply contracts

make contracts for services and supplies without regard to the provisions of section 6101 of title 41, when the aggregate amount involved is less than $300;

(b)Subordination, subrogation, and other agreements

enter into subordination, subrogation, or other agreements satisfactory to the Secretary;

(c)Compromise of claims and obligations

compromise, adjust, reduce, or charge-off claims, and adjust, modify, subordinate, or release the terms of security instruments, leases, contracts, and agreements entered into or administered by the Secretary under this subchapter, as circumstances may require, including the release of borrowers or others obligated on a debt from personal liability with or without payment of any consideration at the time of the compromise, adjustment, reduction, or charge-off of any claim;

(d)Collection of claims and obligations

collect all claims and obligations arising out of or under any mortgage, lease, contract, or agreement entered into pursuant to this subchapter and, if in his judgment necessary and advisable, to pursue the same to final collection in any court having jurisdiction: Provided, That the prosecution and defense of all litigation under this subchapter shall be conducted under the supervision of the Attorney General and the legal representation shall be by the United States attorneys for the districts, respectively, in which such litigation may arise and by such other attorney or attorneys as may, under law, be designated by the Attorney General; except that—

(1)prosecution and defense of any litigation under section 1472 of this title shall be conducted, at the discretion of the Secretary, by—

(A)the United States attorneys for the districts in which the litigation arises and any other attorney that the Attorney General may designate under law, under the supervision of the Attorney General;

(B)the General Counsel of the Department of Agriculture; or

(C)any other attorney with whom the Secretary enters into a contract after a determination by the Secretary that—

(i)the attorney will provide competent and cost-effective representation for the Farmers Home Administration; and

(ii)representation by the attorney will either (I) accelerate the process by which a family or person eligible for assistance under section 1472 of this title will be able to purchase and occupy the housing involved; or (II) preserve the quality of the housing involved; and

(2)the Secretary shall annually submit to the Congress a report describing activities carried out under paragraph (1)(C), including the cost of entering into contracts with such attorneys and the savings resulting from expedited foreclosure proceedings;

(e)Purchase of pledged or mortgaged property at foreclosure or other sales; operation, sale or disposition of said property

bid for and purchase at any foreclosure or other sale or otherwise to acquire the property pledged or mortgaged to secure a loan or other indebtedness owing under this subchapter, to accept title to any property so purchased or acquired, to operate or lease such property for such period as may be necessary or advisable, to protect the interest of the United States therein, to repair and rehabilitate such property, and to sell or otherwise dispose of the property so purchased or acquired by such terms and for such considerations as the Secretary shall determine to be reasonable and to make loans as provided herein to provide adequate farm dwellings and buildings for the purchasers of such property; except that the Secretary may not sell or otherwise dispose of such property unless (1) the Secretary assures that such property will meet decent, safe, and sanitary standards, including cost-effective energy conservation standards prescribed under section 1479(a) of this title, (2) the recipient of the property is obligated, as a condition of the sale or other disposition of the property, to meet such standards with respect to the property before such property is occupied, or (3) such recipient is precluded, as a condition of the sale or other disposition of the property, from using the property for residential purposes and the authority of the Secretary under this paragraph includes the authority to transfer section 1472 inventory properties for use as rental or cooperative units under section 1485 of this title with mortgages containing repayment terms with up to fifty years, or for use as rental units under section 1484 of this title with mortgages containing repayment terms with up to 33 years, to private nonprofit organizations, public bodies, or for-profit entities, which have good records of providing low income housing under section 1485 of this title; such a transfer may be made even where rental assistance may be required so long as the authority to provide such assistance is available after taking into account the requirements of section 1490a(d)(1) of this title; where the Secretary determines the transfer will contribute to the provision of housing for very low-income persons and families, the transfer may be made at the lesser of the appraised value or the Farmers Home Administration’s investment;

(f)Processing of applications received prior to determination of nonrural status; assistance

continue processing as expeditiously as possible applications on hand received prior to the time an area has been determined by the Secretary not to be “rural” or a “rural area”, as those terms are defined in section 1490 of this title, and make loans or grants to such applicants who are found to be eligible on the same basis as though the area were still rural;

(g)Rules and regulations for written notice of denial or reduction of assistance

issue rules and regulations which assure that applicants denied assistance under this subchapter or persons or organizations whose assistance under this subchapter is being substantially reduced or terminated are given written notice of the reasons for denial, reduction or termination and are provided at least an opportunity to appeal an adverse decision and to present additional information relevant to that decision to a person, other than the person making the original determination, who has authority to reverse the decision, except that rules issued under this subsection may not exclude from their coverage decisions made by the Secretary that are not based on objective standards contained in published regulations;

(h)Assistance in connection with transfers and assumptions of property for nonrural areas

notwithstanding that an area ceases, or has ceased, to be “rural”, in a “rural area”, or an eligible area, make assistance under this subchapter available for subsequent loans to permit necessary dwelling repairs and rehabilitation and in connection with transfers and assumptions of property securing any loan made, insured, or held by the Secretary or in connection with any property held by the Secretary under this subchapter on the same basis as though the area were still rural;

(i)Utilization of indebtedness

utilize with respect to the indebtedness arising from loans and payments made under this subchapter, all the powers and authorities given to him under sections 1150 to 1150b of title 12;

(j)Fee inspectors and appraisers

utilize the services of fee inspectors and fee appraisers to expedite the processing of applications for loans and grants under this subchapter, which services shall be utilized in any case in which a county or district office is unable to expeditiously process such loan and grant applications, and to include the cost of such services in the amount of such loans and grants; and

(k)Rules and regulations

make such rules and regulations as he deems necessary to carry out the purposes of this subchapter.

Notes & Related Subsidiaries

Editorial Notes

Codification In subsec. (a), “section 6101 of title 41” substituted for “section 3709 of the Revised Statutes, as amended” on authority of Pub. L. 111–350, § 6(c), Jan. 4, 2011, 124 Stat. 3854, which Act enacted Title 41, Public Contracts.

Amendments

1990—Subsec. (e)(3). Pub. L. 101–625, § 710, inserted “, or for use as rental units under section 1484 of this title with mortgages containing repayment terms with up to 33 years,” after “fifty years” and substituted “, public bodies, or for-profit entities, which have good records of providing low income housing under section 1485 of this title” for “or public bodies”. Subsec. (g). Pub. L. 101–625, § 711, inserted before semicolon at end “, except that rules issued under this subsection may not exclude from their coverage decisions made by the Secretary that are not based on objective standards contained in published

Regulations

”. 1988—Subsec. (c). Pub. L. 100–242 amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “compromise claims and obligations arising out of sections 1472 to 1475 of this title and adjust and modify the terms of mortgages, leases, contracts, and agreements entered into as circumstances may require, including the release from personal liability, without payments of further consideration, of— “(1) borrowers who have transferred their farms to other approved applicants for loans who have agreed to assume the outstanding indebtedness to the Secretary under this subchapter; and “(2) borrowers who have transferred their farms to other approved applicants for loans who have agreed to assume that portion of the outstanding indebtedness to the Secretary under this subchapter which is equal to the earning capacity value of the farm at the time of the transfer, and borrowers whose farms have been acquired by the Secretary, in cases where the Secretary determines that the original borrowers have cooperated in good faith with the Secretary, have farmed in a workmanlike manner, used due diligence to maintain the security against loss, and otherwise fulfilled the covenants incident to their loans, to the best of their abilities;”. Subsec. (d). Pub. L. 100–628 inserted before semicolon at end “; except that—” and added pars. (1) and (2). 1984—Subsec. (e). Pub. L. 98–479 substituted “; such” and “; where” for “. Such” and “. Where”, respectively. 1983—Subsec. (e). Pub. L. 98–181, § 507(a), inserted provisions relating to the authority of the Secretary to transfer section 1472 inventory property to private nonprofit organizations or public bodies. Subsecs. (j), (k). Pub. L. 98–181, § 507(b), added subsec. (j) and redesignated former subsec. (j) as (k). 1980—Subsec. (e)(1). Pub. L. 96–399, § 508, inserted provisions respecting cost-effective energy conservation standards prescribed under section 1479(a) of this title. Subsec. (h). Pub. L. 96–399, § 510, inserted provisions respecting subsequent loans to permit necessary dwelling repairs and rehabilitation. 1979—Subsec. (e). Pub. L. 96–153 substituted “United States therein, to repair and rehabilitate such property, and to sell” for “United States therein and to sell”, and inserted provision that the Secretary may not sell or otherwise dispose of such property unless the conditions in cls. (1) to (3) are satisfied. 1978—Subsecs. (g) to (j). Pub. L. 95–557 added subsec. (g) and redesignated former subsecs. (g), (h), and (i) as (h), (i), and (j), respectively. 1976—Subsecs. (f) to (i). Pub. L. 94–375 added subsecs. (f) and (g) and redesignated former subsecs. (f) and (g) as (h) and (i), respectively.

Statutory Notes and Related Subsidiaries

Termination of Reporting RequirementsFor termination, effective May 15, 2000, of reporting provisions in subsec. (d)(2) of this section, see section 3003 of Pub. L. 104–66, as amended, set out as a note under section 1113 of Title 31, Money and Finance, and the last item on page 47 of House Document No. 103–7. Study of Problems Caused by Remote Claims Pub. L. 95–557, title V, § 509, Oct. 31, 1978, 92 Stat. 2114, directed Secretary of Agriculture to make a detailed study of problems associated with obtaining title insurance by persons in rural areas with respect to real property encumbered by remote claims and make a final report to Congress with respect to such study not later than one year after Oct. 31, 1978.

§1480 Administrative Powers of Secretary