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Title 7, AgricultureRelease 119-110

§1006b Cancellation of Entry or Purchase Upon Loan Default; Entry or Resale; Conditions; Satisfaction of Indebtedness

Title 7 › CHAPTER 33 — FARM TENANCY › SUBCHAPTER I — TENANT PURCHASE LOANS AND MORTGAGE INSURANCE › § 1006b

Last updated Sep 23, 2026|Official source

Summary

If a borrower breaks the rules of a mortgage tied to a loan under this law, the Secretary of the Interior, or the Secretary of Agriculture if requested, can cancel the entry or purchase contract. After cancellation, the land that still has a mortgage claim can only be offered again to people who qualify for a new entry or purchase and a new loan. Any new entry or resale must cover the unpaid amount owed to the United States, or the portion the Secretaries decide the buyer can pay based on the land’s long-term earning power. If no one takes the land within one year after the cancellation, the Secretary of Agriculture will sell it to pay the mortgage debt and other U.S. charges. The buyer will get a deed once all required payments are made.

Full Legal Text

Title 7, §1006b

Agriculture, Source: USLM XML via OLRC

Any entry or purchase contract land with respect to which a loan is made under the authority of this section and section 1006a of this title shall be subject to cancellation by the Secretary of the Interior as provided by existing law or upon request of the Secretary of Agriculture whenever default occurs in the terms, conditions, covenants, or obligations contained in the mortgage. After cancellation or relinquishment of an entry or purchase contract, land on which there is a mortgage lien, pursuant to the provisions of said sections, shall thereafter, except as hereinafter provided, only be open to entry or resale to persons eligible for both an original entry or purchase contract and an original loan. Such entry or resale shall be subject to the outstanding balance of any amounts due the United States with respect to such land or such portion thereof as may be determined by the Secretary of Agriculture and the Secretary of the Interior, or their delegates, to be within the entryman’s or purchaser’s ability to pay on the basis of the long-time earning capacity of the land. If no entry or purchase is made within one year after the cancellation or relinquishment of a prior entry or purchase of land on which there is such a mortgage lien, the land shall be disposed of by the Secretary of Agriculture on terms consistent with the provisions of section 1017 of this title, for the satisfaction of the indebtedness secured by the mortgage, subject, however, to other outstanding charges on the land due the United States, and the purchaser of such land shall be entitled to the issuance of patent or deed upon the completion of all requirements with respect to the payment of such charges.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 1017 of this title, referred to in text, was repealed by Pub. L. 87–128, title III, § 341(a), Aug. 8, 1961, 75 Stat. 318. Codification Section was not enacted as part of the Bankhead-Jones Farm Tenant Act, which constitutes a major part of this chapter.

Reference

Citations & Metadata

Citation

7 U.S.C. § 1006b

Title 7, Agriculture

Last Updated

Sep 23, 2026

Release point: 119-110