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7 U.S.C. § 936 — Guaranteed loans; accommodations and subordination of liens; interest rates; assignability of guaranteed loans and related guarantees
Federal law — U.S. Code and appendices · legal_authorities
The Secretary may provide financial assistance to borrowers for purposes provided in this chapter by guaranteeing loans, in the full amount thereof, made by the National Rural Utilities Cooperative Finance Corporation and any other legally organized lending agency, or by accommodating or subordinating liens or mortgages in the fund held by the Secretary as owner or as trustee or custodian for purchases of notes from the fund, or by any combination of such guarantee, accommodation, or subordination. The Secretary shall not provide such assistance to any borrower of a telephone loan under this chapter unless the borrower specifically applies for such assistance. No fees or charges shall be assessed for any such accommodation or subordination. Guaranteed loans shall bear interest at the rate agreed upon by the borrower and the lender. Guaranteed loans, and accommodation and subordination of liens or mortgages, may be made concurrently with an insured loan. The amount of guaranteed loans shall be subject only to such limitations as to amounts as may be authorized from time to time by the Congress of the United States: Provided, That any amounts guaranteed hereunder shall not be included in the totals of the budget of the United States Government and shall be exempt from any general limitation imposed by statute on expenditures and net lending (budget outlays) of the United States. As used in this subchapter a guaranteed loan is one which is initially made, held, and serviced by a legally organized lending agency and which is guaranteed by the Secretary hereunder. A guaranteed loan, including the related guarantee, may be assigned to the extent provided in the contract of guarantee executed by the Secretary under this subchapter; the assignability of such loan and guarantee
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Source file: Laws/federal/codes/united-states-code/title-7/section-936-guaranteed-loans-accommodations-and-subordination-of-liens-interest-rate--1a6236cecb.md
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Source location: Title 7, Chapter 31, § 936; chapter-031-rural-electrification-and-telephone-service.md
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The Secretary may provide financial assistance to borrowers for purposes provided in this chapter by guaranteeing loans, in the full amount thereof, made by the National Rural Utilities Cooperative Finance Corporation and any other legally organized lending agency, or by accommodating or subordinating liens or mortgages in the fund held by the Secretary as owner or as trustee or custodian for purchases of notes from the fund, or by any combination of such guarantee, accommodation, or subordination. The Secretary shall not provide such assistance to any borrower of a telephone loan under this chapter unless the borrower specifically applies for such assistance. No fees or charges shall be assessed for any such accommodation or subordination. Guaranteed loans shall bear interest at the rate agreed upon by the borrower and the lender. Guaranteed loans, and accommodation and subordination of liens or mortgages, may be made concurrently with an insured loan. The amount of guaranteed loans shall be subject only to such limitations as to amounts as may be authorized from time to time by the Congress of the United States: Provided, That any amounts guaranteed hereunder shall not be included in the totals of the budget of the United States Government and shall be exempt from any general limitation imposed by statute on expenditures and net lending (budget outlays) of the United States. As used in this subchapter a guaranteed loan is one which is initially made, held, and serviced by a legally organized lending agency and which is guaranteed by the Secretary hereunder. A guaranteed loan, including the related guarantee, may be assigned to the extent provided in the contract of guarantee executed by the Secretary under this subchapter; the assignability of such loan and guarantee shall be governed exclusively by said contract of guarantee.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Definitions** In this section:
(1) **Agricultural commodity** — The term “agricultural commodity” has the meaning given the term in [section 5602 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section5602&num=0&edition=prelim).
(2) **Geographically disadvantaged farmer or rancher** — The term “geographically disadvantaged farmer or rancher” has the meaning given the term in section 10906(a) of the Farm Security and Rural Investment Act of 2002 ([7 U.S.C. 2204](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section2204&num=0&edition=prelim) note; Public Law 107–171).
**(b) Authorization** Subject to the availability of funds under subsection (d), the Secretary may provide geographically disadvantaged farmers or ranchers direct reimbursement payments for activities described in subsection (c).
**(c) Transportation**
(1) **In general** — Subject to paragraphs (2) and (3), the Secretary may provide direct reimbursement payments to a geographically disadvantaged farmer or rancher to transport an agricultural commodity, or inputs used to produce an agricultural commodity, during a fiscal year.
(2) **Proof of eligibility** — To be eligible to receive assistance under paragraph (1), a geographically disadvantaged farmer or rancher shall demonstrate to the Secretary that transportation of the agricultural commodity or inputs occurred over a distance of more than 30 miles, as determined by the Secretary.
(3) **Amount**
(A) *In general* — Subject to paragraph (2), the amount of direct reimbursement payments made to a geographically disadvantaged farmer or rancher under this section for a fiscal year shall equal the product obtained by multiplying—
(i) the amount of costs incurred by the geographically di
Source: Supplied U.S. Code snapshot — release unconfirmed · 7 U.S.C. § 8701
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Federal law — U.S. Code and appendices · legal_authorities
It is hereby declared to be the policy of the Congress that adequate funds should be made available to rural electric and telephone systems through direct, insured and guaranteed loans at interest rates which will allow them to achieve the objectives of the Rural Electrification Act of 1936, as amended [[7 U.S.C. 901](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section901&num=0&edition=prelim) et seq.], and that such rural electric and telephone systems should be encouraged and assisted to develop their resources and ability to achieve the financial strength needed to enable them to satisfy their credit needs from their own financial organizations and other sources at reasonable rates and terms consistent with the loan applicant’s ability to pay and achievement of the Act’s objectives.
Source: Supplied U.S. Code snapshot — release unconfirmed · 7 U.S.C. § 930
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Federal law — U.S. Code and appendices · legal_authorities
Within ten days after the end of the second and fourth calendar quarters of each year, the Secretary shall submit to the Committee on Agriculture and the Committee on Appropriations of the House of Representatives, and to the Committee on Agriculture, Nutrition, and Forestry and the Committee on Appropriations of the Senate, a report—
(1) identifying each completed application for a telephone loan under [section 935 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section935&num=0&edition=prelim) or a guarantee of a telephone loan under [section 936 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section936&num=0&edition=prelim) that has not been finally acted upon within ninety days after the date the completed application is submitted; and
(2) stating the reasons for the failure to finally act upon the completed applications within such ninety-day period.
Source: Supplied U.S. Code snapshot — release unconfirmed · 7 U.S.C. § 928
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** The Secretary is authorized to make insured loans under this subchapter and at the interest rates hereinafter provided to the full extent of the assets available in the fund, subject only to limitations as to amounts authorized for loans and advances as may be from time to time imposed by the Congress of the United States for loans to be made in any one year, which amounts shall remain available until expended: Provided, That the Congress in the annual appropriation Act may also authorize the transfer of any excess cash in the fund for deposit into the Treasury as miscellaneous receipts: And provided further, That any such loans and advances shall not be included in the totals of the budget of the United States Government and shall be exempt from any general limitation imposed by statute on expenditures and net lending (budget outlays) of the United States.
**(b) Insured loans** Loans made under this section shall be insured by the Secretary when purchased by a lender. As used in this chapter, an insured loan is one which is made, held, and serviced by the Secretary, and sold and insured by the Secretary hereunder; such loans shall be sold and insured by the Secretary without undue delay.
**(c) Insured electric loans**
(1) **Hardship loans**
(A) *In general* — The Secretary shall make insured electric loans, to the extent of qualifying applications for the loans, at an interest rate of 5 percent per year to any applicant for a loan who meets each of the following requirements:
(i) The average revenue per kilowatt-hour sold by the applicant is not less than 120 percent of the average revenue per kilowatt-hour sold by all utilities in the State in which the applicant provides service.
(ii) The average residential revenue per kilowatt-hou
Source: Supplied U.S. Code snapshot — release unconfirmed · 7 U.S.C. § 935
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Conditions for prepayment** Except as provided in subsection (c), a borrower of a loan made by the Federal Financing Bank and guaranteed under [section 936 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section936&num=0&edition=prelim) may prepay such loan (or any loan advance thereunder) by paying the outstanding principal balance due on the loan (or advance), if—
(1) the loan is outstanding on July 2, 1986;
(2) private capital, with the existing loan guarantee, is used to replace the loan; and
(3) the borrower certifies that any savings from such prepayment will be passed on to its customers or used to improve the financial strength of the borrower in cases of financial hardship.
**(b) Charges on prepayment prohibited** No sums in addition to the payment of the outstanding principal balance due on the loan may be charged as the result of such prepayment against the borrower, the fund, or the Secretary.
**(c) Disqualification for prepayment on finding of adverse affect on Federal Financing Bank**
(1) A borrower will not qualify for prepayment under this section if, in the opinion of the Secretary of the Treasury, to prepay in such borrower’s case would adversely affect the operation of the Federal Financing Bank.
(2) Paragraph (1) shall be effective in fiscal year 1987 only for any loan the prepayment of the principal amount of which will cause the cumulative amount of net proceeds from all such prepayments made during such year to exceed $2,017,500,000.
**(d) Amount of permissible prepayments; establishment of eligibility criteria**
(1) The Secretary shall permit, subject to subsection (a), prepayments of principal on loans in fiscal year 1987 under this section or Public Law 99–349 in such amounts as to realize net p
Source: Supplied U.S. Code snapshot — release unconfirmed · 7 U.S.C. § 936a
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** A borrower of a loan made by the Federal Financing Bank and guaranteed under [section 936 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section936&num=0&edition=prelim) may, at the option of the borrower, refinance or prepay the loan or an advance on the loan, or any portion of the loan or advance.
**(b) Penalty**
(1) **Determination of penalty** — A penalty shall be assessed against a borrower that refinances or prepays a loan or loan advance, or any portion of a loan or advance, under this section. Except as provided in paragraph (2), the penalty shall be equal to the lesser of—
(A) the difference between the outstanding principal balance of the loan being refinanced and the present value of the loan discounted at a rate equal to the then current cost of funds to the Department of the Treasury for obligations of comparable maturity to the loan being refinanced or prepaid;
(B) 100 percent of the amount of interest for 1 year on the outstanding principal balance of the loan or loan advance, or any portion of the loan or advance, being refinanced, multiplied by the ratio that—
(i) the number of quarterly payment dates between the date of the refinancing or prepayment and the maturity date for the loan advance; bears to
(ii) the number of quarterly payment dates between the first quarterly payment date that occurs 12 years after the end of the year in which the amount being refinanced was advanced and the maturity date of the loan advance; and
(C)
(i) the present value of 100 percent of the amount of interest for 1 year on the outstanding principal balance of the loan or loan advance, or any portion of the loan or advance, being refinanced or prepaid; plus
(ii) for the interval between
Source: Supplied U.S. Code snapshot — release unconfirmed · 7 U.S.C. § 936c
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Federal law — U.S. Code and appendices · legal_authorities
Page 538
TITLE 7—AGRICULTURE
§ 936
‘‘Insured loans made under this subchapter shall bear
interest at 5 per centum per annum, except that the
Administrator may make insured loans to electric or
telephone borrowers at a lesser interest rate, but not
less than 2 per centum per annum, if, in the Adminis-
trator’s sole discretion, the Administrator finds that
the borrower—
‘‘(1) has experienced extreme financial hardship; or
‘‘(2) cannot, in accordance with generally accepted
management and accounting principles and without
charging rates to its customers or subscribers so high
as to create a substantial disparity between such
rates and the rates charged for similar service in the
same or nearby areas by other suppliers, provide serv-
ice consistent with the objectives of this chapter.’’
Subsec. (c). Pub. L. 103–129, § 2(a)(1)(C), added subsec.
(c). Former subsec. (c) redesignated (b).
Subsec. (d). Pub. L. 103–129, § 2(a)(1)(A), (C), added sub-
sec. (d) and struck out former subsec. (d) which read as
follows: ‘‘The Administrator shall make a telephone
loan under this subchapter to an applicant therefor
who is otherwise qualified to receive such a loan at the
highest interest rate (but not less than the lowest in-
terest rate, nor higher than the highest interest rate,
specified in subsection (b) of this section) at which the
borrower would be capable of producing net income or
margins before interest payments of at least 100 per-
cent (but not more than 150 percent) of the interest re-
quirements on all of the applicant’s outstanding and
proposed loans.’’
1990—Subsec. (d). Pub. L. 101–624 added subsec. (d).
1981—Subsec. (b). Pub. L. 97–35 substituted provisions
establishing an interest rate at 5 per centum per
annum and a lower rate, but not less than
Source: Supplied 2024 U.S. Code historical extraction · 7 U.S.C. § 936
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.