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Title 43, Public LandsRelease 119-110

§2423 Loan Guarantees

Title 43 › CHAPTER 42 — RURAL WATER SUPPLY › SUBCHAPTER II — TWENTY-FIRST CENTURY WATER WORKS › § 2423

Last updated Sep 22, 2026|Official source

Summary

If money is available, the Secretary may promise to back loans to lenders for projects that meet the rules in section 2422. The Secretary will set terms to protect the U.S. government’s money. Guarantees can cover up to 90% of the project cost as estimated when issued. Interest rates are set by the Secretary, who will consider private rates and risk. Loans must be paid off within 40 years and cannot be ranked below other financing. Any prepayment or refinancing must be agreed by the borrower and lender with the Secretary’s approval.

Full Legal Text

Title 43, §2423

Public Lands, Source: USLM XML via OLRC

(a)Authority
Subject to the availability of appropriations, the Secretary may make available to lenders for a project meeting the eligibility criteria established in section 2422 of this title loan guarantees to supplement private-sector or lender financing for the project.
(b)Terms and limitations
(1)In general
Loan guarantees under this section for a project shall be on such terms and conditions and contain such covenants, representations, warranties, and requirements as the Secretary determines to be appropriate to protect the financial interests of the United States.
(2)Amount
Loan guarantees by the Secretary shall not exceed an amount equal to 90 percent of the cost of the project that is the subject of the loan guarantee, as estimated at the time at which the loan guarantee is issued.
(3)Interest rate
An obligation shall bear interest at a rate that does not exceed a level that the Secretary determines to be appropriate, taking into account the prevailing rate of interest in the private sector for similar loans and risks.
(4)Amortization
A loan guarantee under this section shall provide for complete amortization of the loan guarantee within not more than 40 years.
(5)Nonsubordination
An obligation shall be subject to the condition that the obligation is not subordinate to other financing.
(c)Prepayment and refinancing
Any prepayment or refinancing terms on a loan guarantee shall be negotiated between the non-Federal borrower and the lender with the consent of the Secretary.

Reference

Citations & Metadata

Citation

43 U.S.C. § 2423

Title 43, Public Lands

Last Updated

Sep 22, 2026

Release point: 119-110