§912 Extension of Time for Repayment of Loans

Summary

The Secretary can give borrowers more time to pay back loans made under this law. Loans made under sections 904 or 922 cannot have their payment time extended more than five years after the payment was due. Some deferrals are allowed only as money is made available by yearly appropriations, and a deferment cannot be granted just because the Secretary decides the borrower is in financial hardship. Borrowers may be allowed to skip payments to use that money to finance local businesses or community development projects. If the deferment is to help finance local businesses, it must be paid back in equal, interest-free installments over 60 months. For other community, business, or economic development work, it must be paid back in equal, interest-free installments over 120 months. A borrower can only defer an amount equal to its investment for the project, and the deferment cannot be more than 50 percent of the project’s cost. Total deferments each year are limited to 3 percent of all loan payments due in fiscal years 1990–1993 and 5 percent in later years. At the time of a deferment, the borrower must put the deferred amount into a cushion-of-credit account and keep that account at least equal to the unpaid deferred balance; those amounts are counted in the interest calculations under the related law. The Secretary must try to allow the full amount of deferments authorized each year. The Secretary must also allow deferments on direct loans that let borrowers make loans to customers for energy audits and energy-saving measures; those deferments cannot exceed the loaned principal plus interest and cannot last more than 60 months.