7 U.S.C. § 1927
The borrower shall pay such fees and other charges as the Secretary may require, and borrowers under this chapter shall prepay to the Secretary such taxes and insurance as the Secretary may require, on such terms and conditions as the Secretary may prescribe.
The Secretary shall take as security for the obligations entered into in connection with loans, mortgages on farms with respect to which such loans are made or such other security as the Secretary may require, and for obligations in connection with loans to associations under section 1926 of this title, shall take liens on the facility or such other security as he may determine to be necessary. Such security instruments may constitute liens running to the United States notwithstanding the fact that the notes may be held by lenders other than the United States. A borrower may use the same collateral to secure two or more loans made, insured, or guaranteed under this subchapter, except that the outstanding amount of such loans may not exceed the total value of the collateral so used.
The Secretary may not-
1So in original. The semicolon probably should be a comma.
7 U.S.C. § 1927
EDITORIAL NOTES
REFERENCES IN TEXTThe date of enactment of this subparagraph, referred to in subsec. (a)(3)(E)(ii), is the date of enactment of Pub. L. 110-246 which was approved June 18, 2008.This chapter, referred to in subsecs. (a)(6)(A), (b), and (d)(1), was in the original "this title", meaning title III of Pub. L. 87-128, Aug. 8, 1961, 75 Stat. 307, known as the Consolidated Farm and Rural Development Act, which is classified principally to this chapter. For complete classification of title III to the Code, see Short Title note set out under section 1921 of this title and Tables.
CODIFICATION 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 L. 110-234 were repealed by section 4(a) of Pub.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.
AMENDMENTS2014-Subsec. (a)(3)(D). Pub. L. 113-79, §5003, added subpar. (D) and struck out former subpar. (D). Prior to amendment, text read as follows: "If a direct farm ownership loan is made under this subchapter as part of a joint financing arrangement and the amount of the direct farm ownership loan does not exceed 50 percent of the total principal amount financed under the arrangement, the interest rate on the direct farm ownership loan shall be at least 4 percent annually."Subsecs. (d), (e). Pub. L. 113-79, §5004, redesignated subsec. (e) as (d) and struck out former subsec. (d). Prior to amendment, text read as follows: "With respect to a farm ownership loan made after December 23, 1985, unless appraised values of the rights to oil, gas, or other minerals are specifically included as part of the appraised value of collateral securing the loan, the rights to oil, gas, or other minerals located under the property shall not be considered part of the collateral securing the loan. Nothing in this subsection shall prevent the inclusion of, as part of the collateral securing the loan, any payment or other compensation the borrower may receive for damages to the surface of the collateral real estate resulting from the exploration for or recovery of minerals." 2008-Subsec. (a)(3)(E). Pub. L. 110-246, §6011, added subpar. (E).Subsec. (a)(6)(B)(ii). Pub. L. 110-246, §6012(b)(1), added cl. (ii) and struck out former cl. (ii) which read as follows: "clause (1) of section 1932(a) of this title, and". 1996-Subsec. (a)(3)(B). Pub. L. 104-127, §604(1), inserted "subparagraph (D) and in" after "Except as provided in". Subsec. (a)(3)(D). Pub. L. 104-127, §604(2), added subpar. (D).Subsec. (a)(4). Pub. L. 104-127, §661(a)(1), substituted "1926(a)(1) and 1932 of this title" for "1924(b), 1926(a)(1), and 1932 of this title".Subsec. (a)(6)(B). Pub. L. 104-127, §661(a)(2), inserted "and" at end of cl. (v), substituted a period for ",and" at end of cl. (vi), redesignated cls. (iii), (v), and (vi) as (i), (ii), and (iii), respectively, and struck out cls. (i), (ii), (iv), and (vii) which read as follows:"(i) clauses (2) and (3) of section 1923(a) of this title,"(ii) section 1924(b) of this title, "(iv) section 1926(a)(15) of this title, "(vii) section 1934(a) of this title as it relates to the making or insuring of loans under clauses (2) and (3) of section 1923(a) of this title." Subsec. (a)(6)(B)(iii). Pub. L. 104-127, §747(b)(1), substituted "section 1932(d) of this title" for "subsections (d) and (e) of section 1932 of this title". 1994-Subsec. (a)(3)(A). Pub. L. 103-328, §113(a)(1), substituted "Notwithstanding the provisions of the constitution or laws of any State limiting the rate or amount of interest that may be charged, taken, received, or reserved, except" for "Except". Subsec. (a)(5). Pub. L. 103-328, §113(a)(2), substituted "(5)(A) Except as provided in subparagraph (B), the" for "(5) The" and added subpar. (B). 1992-Subsec. (a)(6)(B)(ii) to (viii). Pub. L. 102-552 redesignated cls. (iii) to (viii) as (ii) to (vii) and struck out former cl. (ii) which read as follows: "the provisions of section 1924(a) of this title, relating to the financing of outdoor recreational enterprises or the conversion of farming or ranching operations to recreational uses,". 1990-Subsec. (a)(3)(A). Pub. L. 101-624, §2383(1), substituted "guaranteed" for "guranteed".Subsec. (a)(3)(B). Pub. L. 101-624, §1803(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: "Except as provided in paragraph (6), the interest rates on loans (other than guaranteed loans) under section 1934 of this title shall be as determined by the Secretary, but not in excess of one-half of the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans, nor less than 5 per centum per annum."Subsec. (a)(3)(C). Pub. L. 101-624, §2383(2), added subpar. (C).1988-Subsec. (c). Pub. L. 100-233, §603, inserted provisions at end relating to use of same collateral to secure two or more loans made, insured, or guaranteed under this subchapter. Subsec. (e). Pub. L. 100-233, §604, added subsec. (e). 1985-Subsec. (a)(3)(A). Pub. L. 99-198, §1304A, substituted "where the median household income of the persons to be served by such facility is below the higher of 80 per centum of the statewide nonmetropolitan median household income or the poverty line established by the Office of Management and Budget, as revised under section 9902(2) of title 42" for "where the median family income of the persons to be served by such facility is below the poverty line prescribed by the Office of Management and Budget as adjusted under section 2971d of title 42" and prescribed a 7 per centum per annum ceiling on loans for facilities that do not qualify for the 5 per centum per annum interest rate but are located in areas where the median household income of the persons to be served by the facility does not exceed 100 per centum of the statewide nonmetropolitan median household income.Subsec. (d). Pub. L. 99-198, §1305, added subsec. (d).1981-Subsec. (a). Pub. L. 97-35 in par. (2) inserted reference to par. (6), in par. (3) designated existing provisions as subpar. (A), expanded provisions to take into account provisions of par. (6) and revised criteria for determination of applicable interest rates, and added subpar. (B), in par. (4) inserted exception for par. (6), and added par. (6).1978-Subsec. (a). Pub. L. 95-334, §108(1), substituted provisions relating to determination of interest rates on loans, except as provided in pars. (3) to (5), as not in excess of the current average market yield on outstanding marketable obligations of the United States, with comparable remaining periods of maturity to the average maturities of such loans plus additional adjusted amounts, for provisions relating to establishment of interest rates on loans, except as specifically provided, but not in excess of 5 per centum per annum. Subsecs. (b), (c). Pub. L. 95-334, §108(2), (3), added subsec. (b) and redesignated former subsec. (b) as (c). 1972-Subsec. (a). Pub. L. 92-419, §§113, 114, prescribed interest rates on rural development other than guaranteed and guaranteed loans and escrow payment of taxes and insurance, respectively.Subsec. (b). Pub. L. 92-419, §128(b), substituted "may" for "shall" in second sentence.
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2008 AMENDMENT Amendment 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.
EFFECTIVE DATE OF 1994 AMENDMENT Pub. L. 103-328, title I, §113(b), Sept. 29, 1994, 108 Stat. 2366, provided that:"(1) IN GENERAL.-Except as provided in paragraphs (2) and (3), the amendments made by subsection (a) [amending this section] shall apply to a loan made, insured, or guaranteed under the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) in a State on or after the date of enactment of this Act [Sept. 29, 1994]."(2) STATE OPTION.-Except as provided in paragraph (3), the amendments made by subsection (a) shall not apply to a loan made, insured, or guaranteed under the Consolidated Farm and Rural Development Act in a State after the date (that occurs during the 3-year period beginning on the date of enactment of this Act) on which the State adopts a law or certifies that the voters of the State have voted in favor of a provision of the constitution or law of the State that states that the State does not want the amendments made by subsection (a) to apply with respect to loans made, insured, or guaranteed under such Act in the State."(3) TRANSITIONAL PERIOD.-In any case in which a State takes an action described in paragraph (2), the amendments made by subsection (a) shall continue to apply to a loan made, insured, or guaranteed under the Consolidated Farm and Rural Development Act in the State after the date the action was taken pursuant to a commitment for the loan that was entered into during the period beginning on the date of enactment of this Act, and ending on the date on which the State takes the action."
EFFECTIVE DATE OF 1992 AMENDMENT Pub. L. 102-552, title V, §516(c)(2), Oct. 28, 1992, 106 Stat. 4137, provided that: "The amendments made by paragraph (1) of this subsection [amending this section] shall take effect at the same time as the amendments made by section 501(a) of the Food, Agriculture, Conservation, and Trade Act Amendments of 1991 (Public Law 102-237; 105 Stat. 1865) [amending section 1924 of this title] took effect.
EFFECTIVE DATE OF 1981 AMENDMENT Pub. L. 97-35, title I, §160(c), Aug. 13, 1981, 95 Stat. 378, provided that: "The amendments made by this section [amending this section and section 1946 of this title] shall apply to loans approved after September 30, 1981."
- borrower
- The term "borrower" means any farm borrower who has outstanding obligations to the Secretary under any farmer program loan, without regard to whether the loan has been accelerated, but does not include any farm borrower all of whose loans and accounts have been foreclosed on or liquidated, voluntarily or otherwise.
- direct loan
- The term "direct loan" means a loan made or insured from funds in the account created by section 1929 of this title.
- farmer program loan
- The term "farmer program loan" means a farm ownership loan (FO) under section 1923 of this title, operating loan (OL) under section 1942 of this title, soil and water loan (SW) under section 1924 of this title, emergency loan (EM) under section 1961 of this title, economic emergency loan (EE) under section 202 of the Emergency Agricultural Credit Adjustment Act (title II of Public Law 95-334), economic opportunity loan (EO) under the Economic Opportunity Act of 1961 ( 42 U.S.C. 2942 ), softwood timber loan (ST) under section 1254 of the Food Security Act of 1985, or rural housing loan for farm service buildings (RHF) under section 1472 of title 42.