§912 Extension of Time for Repayment of Loans

Summary

The Secretary can delay when borrowers must pay interest or principal on loans made under this chapter. For loans made under sections 904 or 922, payments can be delayed no more than five years after they became due. If Congress limits money in appropriations laws, the Secretary may allow borrowers to defer payments for certain activities, but not just because the Secretary finds the borrower has financial hardship. If a deferment is for lending to local businesses, the deferred amount must be paid back in equal, no-interest payments over 60 months. If it is for other community or economic development work (like technical help or other projects), it must be repaid in equal, no-interest payments over 120 months. A borrower can only defer up to the amount they invest for those purposes, and the deferment cannot be more than 50% of a project’s total cost. In fiscal years 1990–1993, total deferments each year could not exceed 3% of all borrowers’ payments due; after that, the limit is 5% each year. When a deferment is approved, the borrower must deposit the same amount into a cushion-of-credit account and keep that balance at least equal to the unpaid deferred amount; those deposits can be counted in the interest-differential calculation under section 940c(b)(2) if appropriations rules allow. The Secretary must try to allow the full amount of authorized deferments each year. The Secretary must also let borrowers delay payments on direct loans so the borrower can lend to homes, businesses, or factories for energy audits or for installing devices that cut electric demand. Those deferments cannot be more than the principal and interest on the loans made to the customer, as the Secretary decides, and the delay cannot last more than 60 months.