Title 7, AgricultureRelease 119-110
§1943 Limitations on Amount of Operating Loans
Title 7 › CHAPTER 50 — AGRICULTURAL CREDIT › SUBCHAPTER II — OPERATING LOANS › § 1943
Summary
Limits how much one borrower can owe at one time under this loan program. For direct loans the cap is $400,000. For loans the Secretary guarantees the cap is $1,750,000. Beginning in fiscal year 2019, the guaranteed-loan cap is increased by an inflation percentage for that year and is reduced by any unpaid debt the borrower has on certain other guaranteed loans listed in section 1925. Loans cannot be made or insured to buy or lease land (except for cash rent) or to run a land leasing or land buying program. The inflation percentage is the percent change in the "Prices Paid By Farmers" index when comparing the 12 months ending July 31 of the previous fiscal year to the 12 months before that. The Secretary may create a microloan program. One borrower may not have more than $50,000 in microloan debt at any time. The Secretary should keep the microloan application and approval process simple. From fiscal years 2014 through 2023, the Secretary may run pilot projects that lend to community development financial institutions so those institutions can make or guarantee microloans and provide business, financial, marketing, and credit help to borrowers. Before lending to such institutions, the Secretary must approve their loan loss reserve fund and underwriting standards and can set other requirements. Eligible institutions must have legal authority, a track record helping farm borrowers, and staff with loan experience, and they must give the Secretary required information at least once a year. No more than $10,000,000 in loans may be made under this pilot in any fiscal year.
Full Legal Text
Title 7, §1943
Agriculture, Source: USLM XML via OLRC
(a)In general
The Secretary shall make or insure no loan under this subchapter—
(1)that would cause the total principal indebtedness outstanding at any one time for loans made under this subchapter to any one borrower to exceed, in the case of a loan other than a loan guaranteed by the Secretary, $400,000, or, in the case of a loan guaranteed by the Secretary, $1,750,000 (increased, beginning with fiscal year 2019, by the inflation percentage applicable to the fiscal year in which the loan is guaranteed and reduced by the unpaid indebtedness of the borrower on loans under the sections specified in section 1925 of this title that are guaranteed by the Secretary); or
(2)for the purchasing or leasing of land other than for cash rent, or for carrying on any land leasing or land purchasing program.
(b)Inflation percentage
For purposes of this section, the inflation percentage applicable to a fiscal year is the percentage (if any) by which—
(1)the average of the Prices Paid By Farmers Index (as compiled by the National Agricultural Statistics Service of the Department of Agriculture) for the 12-month period ending on July 31 of the immediately preceding fiscal year; exceeds
(2)the average of such index (as so defined) for the 12-month period that immediately precedes the 12-month period described in paragraph (1).
(c)Microloans
(1)In general
Subject to paragraph (2), the Secretary may establish a program to make or guarantee microloans.
(2)Limitations
The Secretary shall not make or guarantee a microloan under this subsection that would cause the total principal indebtedness outstanding at any 1 time for microloans made under this subsection to any 1 borrower to exceed $50,000.
(3)Applications
To the maximum extent practicable, the Secretary shall limit the administrative burdens and streamline the application and approval process for microloans under this subsection.
(4)Cooperative lending pilot projects
(A)In general
Subject to subparagraph (B), during each of the 2014 through 2023 fiscal years, the Secretary may carry out a pilot project to make loans to community development financial institutions, as the Secretary determines appropriate—
(i)to make or guarantee microloans consistent with the terms provided under this subsection; and
(ii)to provide business, financial, marketing, and credit management services to microloan borrowers.
(B)Requirements
Prior to making a loan to an institution described in subparagraph (A), the Secretary shall—
(i)review and approve—
(I)the loan loss reserve fund for microloans established by the institution; and
(II)the underwriting standards for microloans of the institution; and
(ii)establish such other requirements for making a loan to the institution as the Secretary determines necessary.
(C)Eligibility
To be eligible for a loan under subparagraph (A), an institution described in subparagraph (A) shall, as determined by the Secretary—
(i)have the legal authority necessary to carry out the actions described in subparagraph (A);
(ii)have a proven track record of successfully assisting agricultural borrowers; and
(iii)have the services of a staff with appropriate loan making and servicing expertise.
(D)Oversight
Not less often than annually, on a date determined by the Secretary, an institution that has a loan under this paragraph shall provide to the Secretary such information as the Secretary may require to ensure that the services provided by the institution are serving the purposes of this subsection.
(E)Limitation
The Secretary shall not make more than $10,000,000 in loans under this paragraph in any fiscal year.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Codification The authorities provided by each provision of, and each amendment made by, Pub. L. 115–334, as in effect on Sept. 30, 2025, to continue, and authorities to be carried out, until the later of Sept. 30, 2026; the date specified in the provision of Pub. L. 115–234 or
Amendments
made by that Act or by any other provisions of law enacted thereafter, including Pub. L. 118–234 and Pub. L. 119–21; or the date in effect pursuant to section 4101 of Pub. L. 118–158, see section 5002(a) of Pub. L. 119–37, set out in an Extension of Agricultural Programs note under section 9001 of this title. The authorities provided by each provision of, and each amendment made by, Pub. L. 115–334, as in effect on Sept. 30, 2024, to continue, and authorities to be carried out, until the later of Sept. 30, 2025; the date specified in the provision of, or amendment made by, Pub. L. 115–334; or the date in effect pursuant to section 102 of Pub. L. 118–22, see section 4101(a) of Pub. L. 118–158, set out in an Extension of Agricultural Programs note under section 9001 of this title. The authorities provided by each provision of, and each amendment made by, Pub. L. 115–334, as in effect on Sept. 30, 2023, to continue, and authorities to be carried out, until the later of Sept. 30, 2024, or the date specified in the provision of, or amendment made by, Pub. L. 115–334, see section 102(a) of Pub. L. 118–22, set out in an Extension of Agricultural Programs note under section 9001 of this title. Pub. L. 110–234 and Pub. L. 110–246 made identical
Amendments
to this section. The
Amendments
by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246.
Amendments
2018—Subsec. (a)(1). Pub. L. 115–334, § 5201(1), substituted “$400,000” for “$300,000”, “$1,750,000” for “$700,000”, and “2019” for “2000”. Subsec. (b)(1). Pub. L. 115–334, § 5201(2)(A), substituted “July” for “August”. Subsec. (b)(2). Pub. L. 115–334, § 5201(2)(B), substituted “that immediately precedes the 12-month period described in paragraph (1)” for “ending on August 31, 1996”. Subsec. (c)(2). Pub. L. 115–334, § 5202, substituted “subsection to any 1 borrower” for “chapter to any 1 borrower”. Subsec. (c)(4)(A). Pub. L. 115–334, § 5203, substituted “2023” for “2018” in introductory provisions. 2014—Subsec. (c). Pub. L. 113–79 added subsec. (c). 2008—Subsec. (a)(1). Pub. L. 110–246, § 5102, substituted “$300,000” for “$200,000”. 1998—Pub. L. 105–277 inserted section catchline, designated existing provisions as subsec. (a), inserted heading, substituted “this subchapter—” for “this subchapter”, in introductory provisions, realigned margin of par. (1) and substituted “$700,000 (increased, beginning with fiscal year 2000, by the inflation percentage applicable to the fiscal year in which the loan is guaranteed and reduced by the unpaid indebtedness of the borrower on loans under the sections specified in section 1925 of this title that are guaranteed by the Secretary); or” for “$400,000; or”, realigned margin of par. (2), and added subsec. (b). 1984—Pub. L. 98–258 substituted “$200,000” and “$400,000” for “$100,000” and “$200,000”, respectively. 1978—Pub. L. 95–334 substituted provisions setting forth criteria for Secretary to make or insure loans under this subchapter for provisions setting forth criteria for Secretary to make loans under this subchapter. 1972—Pub. L. 92–419 substituted “$50,000” for “$35,000”. 1968—Pub. L. 90–488 struck out from item (1) the proviso which limited the amount to be used for loans which would cause the indebtedness of any borrower to exceed $15,000 to 25 per centum of the sums made available for loans.
Statutory Notes and Related Subsidiaries
Effective Date
of 2008 AmendmentAmendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an
Effective Date
note under section 8701 of this title.
Reference
Citations & Metadata
Citation
7 U.S.C. § 1943
Title 7, Agriculture
Last Updated
Sep 22, 2026
Release point: 119-110