7 USC 1941 - Persons eligible for loans

U.S Code last checked for updates: Nov 22, 2024

§ 1941.

Persons eligible for loans

(a)

In general

(1)

Eligibility requirements

(2)

Special rule

(b)

Rural youths in 4–H Clubs, Future Farmers of America, etc.

(1)

Loans may also be made under this subchapter without regard to the requirements of clauses (2) and (3) of subsection (a) to youths to enable them to operate enterprises in connection with their participation in 4–H Clubs, Future Farmers of America, and similar organizations.

(2)

A person receiving a loan under this subsection who executes a promissory note therefor shall thereby incur full personal liability for the indebtedness evidenced by such note in accordance with its terms free of any disability of minority.

(3)

For loans under this subsection the Secretary may accept the personal liability of a cosigner of the promissory note in addition to the borrowers’ personal liability.

(4)

Youth enterprises not farming or ranching.—

The operation of an enterprise by a youth under this subsection shall not be considered the operation of a farm or ranch under this chapter.

(5)

Equitable considerations for default.—

(A)

Debt forgiveness.—

(i)

In general.—

The Secretary may, on a case-by-case basis, provide debt forgiveness to a borrower for a loan made under this subsection if the borrower was unable to timely repay the loan due to circumstances beyond the control of the borrower, as determined by the Secretary, including any natural disaster, act of terrorism, or other man-made disaster that results in an inordinate level of damage or disruption severely affecting the borrower.

(ii)

Eligibility for future loans.—

Notwithstanding any other provision of law, debt forgiveness provided under this subparagraph shall not be used by any Federal agency in determining the eligibility of the borrower for any loan made or guaranteed by the agency.

(B)

Education loans.—

Notwithstanding any other provision of law, if a borrower becomes delinquent or is provided with debt forgiveness with respect to a youth loan made under this subsection, the borrower shall not become ineligible, as a result of the delinquency or debt forgiveness, to receive loans and loan guarantees from the Federal Government to pay for education expenses of the borrower.

(c)

Direct loans

(1)

In general

Subject to paragraphs (3) and (4), the Secretary may make a direct loan under this subchapter only to a farmer or rancher who—

(A)

is a qualified beginning farmer or rancher;

(B)

has not received a previous direct operating loan made under this subchapter; or

(C)

has received a previous direct operating loan made under this subchapter during 6 or fewer years.

(2)

Definition of direct operating loan

In this subsection, the term “direct operating loan” does not include—

(A)

a loan made to a youth under subsection (b); or

(B)

a microloan made to a beginning farmer or rancher or a veteran farmer or rancher (as defined in section 2279(e) 1

 See References in Text note below.

of this title).

(3)

Transition rule

(4)

Waivers

(A)

Farm and ranch operations on tribal lands

(B)

Other farm and ranch operations

On a case-by-case determination not subject to administrative appeal, the Secretary may grant a borrower a waiver, 1 time only for a period of 2 years, of the limitation under paragraph (1)(C) or (3) for a direct operating loan if the borrower demonstrates to the satisfaction of the Secretary that—

(i)

the borrower has a viable farm or ranch operation;

(ii)

the borrower applied for commercial credit from at least 2 commercial lenders;

(iii)

the borrower was unable to obtain a commercial loan (including a loan guaranteed by the Secretary); and

(iv)

the borrower successfully has completed, or will complete within 1 year, borrower training under section 2006a of this title (from which requirement the Secretary shall not grant a waiver under section 2006a(f) of this title).

(5)

Annual report on term limits on direct operating loans

(A)

In general

The Secretary shall prepare a report annually that describes—

(i)

the status of the direct operating loan program of the Department of Agriculture; and

(ii)

the impact of term limits on direct loan borrowers.

(B)

Demographic information

(i)

In general

The report shall provide a demographic breakdown, on a State-by-State basis, of—

(I)

all direct loan borrowers; and

(II)

borrowers that have reached the eligibility limit for direct lending programs during the previous calendar year.

(ii)

Demographic information

(C)

Additional content

In addition to information described in subparagraph (B), the report shall provide—

(i)

a demographic analysis of the borrowers impacted by term limits;

(ii)

information on the conditions impacting the direct lending portfolio of the Department of Agriculture, including impacts by region and agriculture sector, and credit availability within those regions and sectors;

(iii)

to the maximum extent practicable, information on the status of borrower operations impacted by term limits; and

(iv)

recommendations, if appropriate, to address any identifiable unmet credit needs.

(D)

Submission

The Secretary shall—

(i)

annually submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a copy of the report; and

(ii)

make the report available to the public, including posting the report on the website of the Department of Agriculture.

(Pub. L. 87–128, title III, § 311, Aug. 8, 1961, 75 Stat. 310; Pub. L. 92–419, title I, § 120(a), Aug. 30, 1972, 86 Stat. 665; Pub. L. 95–334, title I, § 114, Aug. 4, 1978, 92 Stat. 425; Pub. L. 97–98, title XVI, § 1601(b), Dec. 22, 1981, 95 Stat. 1346; Pub. L. 99–198, title XIII, §§ 1301(a), 1302(b), 1303, Dec. 23, 1985, 99 Stat. 1518, 1519; Pub. L. 104–127, title VI, §§ 611, 661(f), Apr. 4, 1996, 110 Stat. 1087, 1107; Pub. L. 105–277, div. A, § 101(a) [title VIII, § 805(2)], Oct. 21, 1998, 112 Stat. 2681, 2681–39; Pub. L. 107–171, title V, §§ 5101, 5302(a), May 13, 2002, 116 Stat. 343, 344; Pub. L. 110–234, title V, § 5101, May 22, 2008, 122 Stat. 1146; Pub. L. 110–246, § 4(a), title V, § 5101, June 18, 2008, 122 Stat. 1664, 1907; Pub. L. 113–79, title V, §§ 5101–5104, 5106(b)(1), Feb. 7, 2014, 128 Stat. 834–836, 838.)

cite as: 7 USC 1941