---
kind: "range"
citation: "42 U.S.C. §§ 1471–1474"
title: "42"
from: "1471"
to: "1474"
count: 5
release: "119-102"
url: "https://uscodex.org/usc/42/1471..1474"
---

# §1471. Financial assistance by Secretary of Agriculture

- (a) **Authorization and purposes of assistance—** The [Secretary](/usc/42/242q–4.md?p=2) of Agriculture (hereinafter referred to as the “[Secretary](/usc/42/242q–4.md?p=2)”) is authorized, subject to the terms and conditions of this subchapter, to extend financial assistance, through the Farmers Home Administration, (1) to [owners](#b-2) of farms in the [United States](/usc/42/403.md?p=k) and in the Territories of Alaska and Hawaii and in the Commonwealth of Puerto Rico, the Virgin Islands, the territories and possessions of the [United States](/usc/42/403.md?p=k), and the [Trust](/usc/42/12854.md?p=6) Territory of the Pacific Islands, to enable them to construct, improve, alter, [repair](#a-5), or replace dwellings and other farm [buildings](/usc/42/6881.md?p=i-3) on their farms, and to purchase [buildings](/usc/42/6881.md?p=i-3) and land constituting a minimum adequate site, in order to provide them, their tenants, lessees, sharecroppers, and laborers with decent, safe, and sanitary living conditions and adequate farm [buildings](/usc/42/6881.md?p=i-3) as specified in this subchapter, and (2) to [owners](#b-2) of other real estate in rural areas for the [construction](/usc/42/7479.md?p=2-C), improvement, alteration, or [repair](#a-5) of dwellings, [related facilities](/usc/42/1486.md?p=g-2), and farm [buildings](/usc/42/6881.md?p=i-3) and to [rural residents](#b-7), including [persons](/usc/42/1320a–7k.md?p=d-4-C-i) who reside in reservations or villages of [Indian tribes](#b-6), for such purposes and for the purchase of [buildings](/usc/42/6881.md?p=i-3) and the purchase of land constituting a minimum adequate site, in order to enable them to provide dwellings and [related facilities](/usc/42/1486.md?p=g-2) for their own use and [buildings](/usc/42/6881.md?p=i-3) adequate for their farming operations, and (3) to elderly or handicapped persons or families who are or will be the [owners](#b-2) of land in rural areas for the [construction](/usc/42/7479.md?p=2-C), improvement, alteration, or [repair](#a-5) of dwellings and [related facilities](/usc/42/1486.md?p=g-2), the purchase of dwellings and [related facilities](/usc/42/1486.md?p=g-2) and the purchase of land constituting a minimum adequate site, in order to provide them with [adequate dwellings](#b-8) and [related facilities](/usc/42/1486.md?p=g-2) for their own use, and (4) to an [owner](#b-2) described in clause (1), (2), or (3) for refinancing indebtedness which—
  - (A) was incurred for an eligible purpose described in such clause, and
  - (B)
    - (i) if not refinanced, is likely to result (because of circumstances beyond the control of the applicant) at an early date in the loss of the applicant’s necessary dwelling or essential farm service [buildings](/usc/42/6881.md?p=i-3), or
    - (ii) if combined (in the case of a dwelling that the [Secretary](/usc/42/242q–4.md?p=2) finds not to be decent, safe, and sanitary) with a loan for improvement, [rehabilitation](#a-5), or [repairs](#a-5) and not refinanced, is likely to result in the applicant’s continuing to be deprived of a decent, safe, and sanitary dwelling.
  - (5) **[^1] Definitions.—** For purposes of this subchapter, the terms “repair”, “repairs”, “rehabilitate”, and “rehabilitation” include measures to evaluate and reduce [lead-based paint](/usc/42/4851b.md?p=14) [hazards](/usc/42/5165f.md?p=a-3), as such terms are defined in [section 4851b of this title](/usc/42/4851b.md).
- (b) **Definitions—**
  - (1) For the purpose of this subchapter, the term “farm” shall mean a parcel or parcels of land operated as a [single](/usc/42/2304.md?p=m) [unit](/usc/42/1395w–114b.md?p=g-2) which is used for the production of one or more agricultural commodities and which customarily produces or is capable of producing such commodities for sale and for home use of a gross annual value of not less than the equivalent of a gross annual value of $400 in 1944, as determined by the [Secretary](/usc/42/242q–4.md?p=2). The [Secretary](/usc/42/242q–4.md?p=2) shall promptly determine whether any parcel or parcels of land constitute a farm for the purposes of this subchapter whenever requested to do so by any interested Federal, [State](/usc/42/201.md?p=f), or local [public agency](/usc/42/11851.md?p=8), and his determination shall be conclusive.
  - (2) For the purposes of this subchapter, the terms “owner” and “mortgage” shall be deemed to include, respectively, the lessee of, and other security interest in, any leasehold interest which the [Secretary](/usc/42/242q–4.md?p=2) determines has an unexpired term (A) in the case of a loan, for a period sufficiently beyond the repayment period of the loan to provide adequate security and a reasonable probability of accomplishing the objectives for which the loan is made, and (B) in the case of a grant for a period sufficient to accomplish the objectives for which the grant is made.
  - (3) For the purposes of this subchapter, the term “elderly or handicapped persons or families” means [families](/usc/42/12704.md?p=11) which consist of two or more [persons](/usc/42/1320a–7k.md?p=d-4-C-i), the head of which (or his or her spouse) is at least sixty-two years of age or is handicapped. Such term also means a [single](/usc/42/2304.md?p=m) [person](/usc/42/1320a–7k.md?p=d-4-C-i) who is at least sixty-two years of age or is handicapped. A [person](/usc/42/1320a–7k.md?p=d-4-C-i) shall be considered handicapped if such [person](/usc/42/1320a–7k.md?p=d-4-C-i) is determined, pursuant to regulations issued by the [Secretary](/usc/42/242q–4.md?p=2), to have an impairment which (A) is expected to be of long-continued and indefinite duration, (B) substantially impedes his ability to live independently, and (C) is of such a nature that such ability could be improved by more suitable [housing](/usc/42/1490p–2.md?p=r-3) conditions, or if such [person](/usc/42/1320a–7k.md?p=d-4-C-i) has a [developmental disability](/usc/42/280i.md?p=d-2) as defined in [section 15002 of this title](/usc/42/15002.md). The [Secretary](/usc/42/242q–4.md?p=2) shall prescribe such regulations as may be necessary to prevent abuses in determining, under the definitions contained in this paragraph, eligibility of [families](/usc/42/12704.md?p=11) and [persons](/usc/42/1320a–7k.md?p=d-4-C-i) for admission to and occupancy of [housing](/usc/42/1490p–2.md?p=r-3) constructed with assistance under this subchapter. Notwithstanding the preceding provisions of this paragraph, such term also includes two or more elderly (sixty-two years of age or over) or handicapped [persons](/usc/42/1320a–7k.md?p=d-4-C-i) living together, one or more such [persons](/usc/42/1320a–7k.md?p=d-4-C-i) living with another [person](/usc/42/1320a–7k.md?p=d-4-C-i) who is determined (under regulations prescribed by the [Secretary](/usc/42/242q–4.md?p=2)) to be essential to the care or well-being of such [persons](/usc/42/1320a–7k.md?p=d-4-C-i), and the surviving member or members of any [family](/usc/42/290ff–4.md?p=d-2) described in the first sentence of this paragraph who were living, in a [unit](/usc/42/1395w–114b.md?p=g-2) assisted under this subchapter, with the deceased member of the [family](/usc/42/290ff–4.md?p=d-2) at the time of his or her death.
  - (4) For the purpose of this subchapter, the terms “low income families or persons” and “very low-income families or persons” means those [families](/usc/42/12704.md?p=11) and [persons](/usc/42/1320a–7k.md?p=d-4-C-i) whose [incomes](#b-5-A) do not exceed the respective levels established for lower [income](#b-5-A) [families](/usc/42/12704.md?p=11) and [very low-income families](/usc/42/8013.md?p=k-9) under the [United States](/usc/42/403.md?p=k) Housing Act of 1937 [[42 U.S.C. 1437](/usc/42/1437.md) et seq.]. Notwithstanding the preceding sentence, the maximum [income](#b-5-A) levels established for purposes of this subchapter for such [families](/usc/42/12704.md?p=11) and [persons](/usc/42/1320a–7k.md?p=d-4-C-i) in the Virgin Islands shall not be less than the highest such levels established for purposes of this subchapter for such [families](/usc/42/12704.md?p=11) and [persons](/usc/42/1320a–7k.md?p=d-4-C-i) in American Samoa, Guam, the Northern Mariana Islands, and the [Trust](/usc/42/12854.md?p=6) Territory of the Pacific Islands. The temporary absence of a [child](/usc/42/416.md?p=e) from the home due to placement in foster care should not be considered in considering [family](/usc/42/290ff–4.md?p=d-2) composition and [family](/usc/42/290ff–4.md?p=d-2) size.
  - (5)
    - (A) For the purpose of this subchapter, the terms “income” and “adjusted income” have the meanings given by sections [3(b)(4)](/usc/42/3.md) and [3(b)(5)](/usc/42/3.md), respectively, of the [United States](/usc/42/403.md?p=k) Housing Act of 1937 [[42 U.S.C. 1437a(b)(4)](/usc/42/1437a.md?p=b-4), (5)].
    - (B) For purposes of this subchapter, the term “[income](#b-5-A)” does not include dividends received from the Alaska Permanent [Fund](/usc/42/12854.md?p=3) by a [person](/usc/42/1320a–7k.md?p=d-4-C-i) who was under the age of 18 years when that [person](/usc/42/1320a–7k.md?p=d-4-C-i) qualified for the dividend.
  - (6) For the purposes of this subchapter, the term “Indian tribe” means any Indian tribe, band, group, and nation, including Alaska [Indians](/usc/42/6862.md?p=6), Aleuts, and Eskimos, and any Alaskan Native Village, of the [United States](/usc/42/403.md?p=k), which is considered an [eligible recipient](/usc/42/3122.md?p=6-B) under the [Indian](/usc/42/6862.md?p=6) Self-Determination and Education Assistance Act (Public Law 93–638) [[25 U.S.C. 5301](/usc/25/5301.md) et seq.] or was considered an [eligible recipient](/usc/42/3122.md?p=6-B) under [chapter 67](/usc/31/chstV-ch67.md) of title 31 prior to the repeal of such chapter.
  - (7) For the purposes of this subchapter, the term “rural resident” shall include a [family](/usc/42/290ff–4.md?p=d-2) or a [person](/usc/42/1320a–7k.md?p=d-4-C-i) who is a renter of a dwelling [unit](/usc/42/1395w–114b.md?p=g-2) in a rural area.
  - (8) For the purposes of this subchapter, the term “adequate dwelling” means a decent, safe, and sanitary dwelling [unit](/usc/42/1395w–114b.md?p=g-2).
- (c) **Conditions of eligibility—** In order to be eligible for the assistance authorized by [subsection (a)](#a), the applicant must show (1) that he is the [owner](#b-2) of a farm which is without a decent, safe, and sanitary dwelling for himself and his [family](/usc/42/290ff–4.md?p=d-2) and necessary resident farm labor, or for the [family](/usc/42/290ff–4.md?p=d-2) of the operating tenant, lessee, or sharecropper, or without other farm [buildings](/usc/42/6881.md?p=i-3) adequate for the type of farming in which he engages or desires to engage, or that he is the [owner](#b-2) of other real estate in a rural area or a [rural resident](#b-7) without an [adequate dwelling](#b-8) or [related facilities](/usc/42/1486.md?p=g-2) for his own use or [buildings](/usc/42/6881.md?p=i-3) adequate for his farming operations, or that the applicant is an elderly or handicapped [person](/usc/42/1320a–7k.md?p=d-4-C-i) or [family](/usc/42/290ff–4.md?p=d-2) in a rural area without an [adequate dwelling](#b-8) or related [facility](/usc/42/11049.md?p=4) for its own use, or that he is the [owner](#b-2) of a farm or other real estate in a rural area who needs refinancing of indebtedness described in clause (4) of subsection (a); (2) that he is without sufficient resources to provide the necessary [housing](/usc/42/1490p–2.md?p=r-3) and [buildings](/usc/42/6881.md?p=i-3) on his own account; and (3) that he is unable to secure the credit necessary for such [housing](/usc/42/1490p–2.md?p=r-3) and [buildings](/usc/42/6881.md?p=i-3) from other sources upon terms and conditions which he could reasonably be expected to fulfill. If an applicant is a [State](/usc/42/201.md?p=f) or local [public agency](/usc/42/11851.md?p=8) or [Indian tribe](#b-6)—
  - (A) the provisions of clause (3) shall not apply to its application; and
  - (B) the applicant shall be eligible to participate in any [program](/usc/42/274l–1.md?p=4) under this subchapter if the [persons](/usc/42/1320a–7k.md?p=d-4-C-i) or [families](/usc/42/12704.md?p=11) to be served by the applicant with the assistance being sought would be eligible to participate in such [program](/usc/42/274l–1.md?p=4).
- (d) **Additional definitions—** As used in this subchapter (except in sections [1473](/usc/42/1473.md) and [1474(b)](/usc/42/1474.md?p=b) of this title) the terms “farm”, “farm dwelling”, and “farm housing” shall include dwellings or other essential [buildings](/usc/42/6881.md?p=i-3) of eligible applicants.
- (e) **Prepayment of taxes, insurance, and other expenses; advances to account of borrower: interest, time for repayment—** The [Secretary](/usc/42/242q–4.md?p=2) shall establish procedures under which borrowers under this subchapter are required to make periodic payments for the purpose of taxes, insurance, and other necessary expenses as the [Secretary](/usc/42/242q–4.md?p=2) may deem appropriate. Notwithstanding any other provision of law, such payments shall not be considered public [funds](/usc/42/12854.md?p=3). The [Secretary](/usc/42/242q–4.md?p=2) shall direct the disbursement of the [funds](/usc/42/12854.md?p=3) at the appropriate time or times for the purposes for which the [funds](/usc/42/12854.md?p=3) were escrowed. The [Secretary](/usc/42/242q–4.md?p=2) shall pay the same rate of interest on escrowed [funds](/usc/42/12854.md?p=3) as is required to be paid on escrowed [funds](/usc/42/12854.md?p=3) held by other lenders in any [State](/usc/42/201.md?p=f) where [State](/usc/42/201.md?p=f) law requires payment of interest on escrowed [funds](/usc/42/12854.md?p=3), subject to appropriations to the extent that additional budget authority is necessary to carry out this sentence. If the prepayments made by the borrower are not sufficient to pay the amount due, advances may be made by the [Secretary](/usc/42/242q–4.md?p=2) to pay the costs in full, which advances shall be charged to the account of the borrower, bear interest, and be payable in a timely fashion as determined by the [Secretary](/usc/42/242q–4.md?p=2). The [Secretary](/usc/42/242q–4.md?p=2) shall notify a borrower in writing when loan payments are delinquent.
- (f) **Increase in loan limits—** With respect to any limitation on the amount of any loan which may be made, insured, or guaranteed under this subchapter for the purchase of a dwelling [unit](/usc/42/1395w–114b.md?p=g-2), the [Secretary](/usc/42/242q–4.md?p=2) may increase such amount by up to 20 percent if such increase is necessary to account for the increased cost of the dwelling [unit](/usc/42/1395w–114b.md?p=g-2) due to the installation of a solar [energy](/usc/42/6311.md?p=7) system (as defined in subparagraph (3) of the last paragraph of [section 1703(a) of title 12](/usc/12/1703.md)) therein.
- (g) **Avoidance of involuntary displacement of families and businesses—** The [programs](/usc/42/274l–1.md?p=4) authorized by this subchapter shall be carried out, consistent with [program](/usc/42/274l–1.md?p=4) goals and objectives, so that the involuntary displacement of [families](/usc/42/12704.md?p=11) and businesses is avoided.
- (h) **Eligibility of resident aliens—** The [Secretary](/usc/42/242q–4.md?p=2) may not restrict the availability of assistance under this subchapter for any alien for whom assistance may not be restricted under [section 1436a of this title](/usc/42/1436a.md).
- (i) **Loan packaging by nonprofit organizations as a “development cost”—** For the purposes of this subchapter, the term “development cost” shall include the packaging of loan and grant applications and actions related thereto by public and private nonprofit organizations tax exempt under [title 26](/usc/26.md).
- (j) **Program transfers—** Notwithstanding any other provision of law, the [Secretary](/usc/42/242q–4.md?p=2) shall not transfer any [program](/usc/42/274l–1.md?p=4) authorized by this subchapter to the Rural Development Administration.

# §1471a. Exemption on construction or modification of residential housing located on an infill site

- (a) **Exemption—** In providing assistance under section 501, 502, 504, 515, 533, or 538 of the Housing Act of 1949 ([42 U.S.C. 1471](/usc/42/1471.md), 1472, 1474, 1485, 1490m, or 1490p–2) for the [construction](/usc/42/7479.md?p=2-C) or [modification](/usc/42/7501.md?p=4) of residential [housing](/usc/42/1490p–2.md?p=r-3) located on an [infill site](#c-2), the [Secretary](/usc/42/242q–4.md?p=2) of Agriculture shall not be required to carry out any study or report on the environmental effects of such assistance.
- (b) **Report—** Not later than the date that is 5 years after July 11, 2026, the [Secretary](/usc/42/242q–4.md?p=2) of Agriculture shall submit, to the Committee on Financial Services of the House of [Representatives](/usc/42/3058f.md?p=5) and the Committee on Banking, [Housing](/usc/42/1490p–2.md?p=r-3), and Urban Affairs of the Senate, a report that—
  - (1) determines whether the implementation of this section—
    - (A) reduced the amount of time it takes to review an application for assistance under the sections of the Housing Act of 1949 identified in [subsection (a)](#a); and
    - (B) reduced the administrative cost of providing such assistance;
  - (2) describes how the implementation of this section affects the affordable [housing](/usc/42/1490p–2.md?p=r-3) sector in rural America; and
  - (3) includes any legislative recommendations from the [Secretary](/usc/42/242q–4.md?p=2) of Agriculture.
- (c) **Definitions—** In this section:
  - (1) **Greenfield—** The term “greenfield” means a site that has not been developed, including a woodland, farmland, and an open field.
  - (2) **Infill site—** The term “infill site”—
    - (A) means a site that is served by existing infrastructure, including water lines, sewer lines, and roads; and
    - (B) does not include—
      - (i) a site that is served by existing infrastructure that only consists of a road;
      - (ii) a site within a census tract designated as very high or relatively high risk for wildfire, coastal flooding, and riverine flooding under the National Risk Index of the Federal Emergency Management Agency pursuant to [section 5136 of this title](/usc/42/5136.md); and
      - (iii) a [greenfield](#c-1).

# §1472. Loans for housing and buildings on adequate farms

- (a) **Terms of loan—**
  - (1) If the [Secretary](/usc/42/242q–4.md?p=2) determines that an applicant is eligible for assistance as provided in [section 1471 of this title](/usc/42/1471.md) and that the applicant has the ability to repay in full the sum to be loaned, with interest, giving due consideration to the [income](/usc/42/1471.md?p=b-5-A) and earning capacity of the applicant and his [family](/usc/42/290ff–4.md?p=d-2) from the farm and other sources, and the maintenance of a reasonable [standard](/usc/42/1320d.md?p=7) of living for the [owner](/usc/42/1471.md?p=b-2) and the occupants of said farm, a loan may be made by the [Secretary](/usc/42/242q–4.md?p=2) to said applicant for a period of not to exceed thirty-three years from the making of the loan with interest. The [Secretary](/usc/42/242q–4.md?p=2) may accept the personal liability of any [person](/usc/42/1320a–7k.md?p=d-4-C-i) with adequate repayment ability who will cosign the applicant’s note to compensate for any deficiency in the applicant’s repayment ability. At the borrower’s option, the borrower may prepay to the [Secretary](/usc/42/242q–4.md?p=2) as escrow agent, on terms and conditions prescribed by him, such taxes, insurance, and other expenses as the [Secretary](/usc/42/242q–4.md?p=2) may require in accordance with [section 1471(e) of this title](/usc/42/1471.md?p=e).
  - (2)
    - (A) The [Secretary](/usc/42/242q–4.md?p=2) may extend the period of any loan made under this section if the [Secretary](/usc/42/242q–4.md?p=2) determines that such extension is necessary to permit the making of such loan to any [person](/usc/42/1320a–7k.md?p=d-4-C-i) whose [income](/usc/42/1471.md?p=b-5-A) does not exceed 60 per centum of the median [income](/usc/42/1471.md?p=b-5-A) for the area and who would otherwise be denied such loan because the payments required under a shorter period would exceed the financial capacity of such [person](/usc/42/1320a–7k.md?p=d-4-C-i). The aggregate period for which any loan may be extended under this subparagraph may not exceed 5 years.
    - (B) The [Secretary](/usc/42/242q–4.md?p=2) may refinance or modify the period of any loan, including any refinanced loan, made under this section in accordance with terms and conditions as the [Secretary](/usc/42/242q–4.md?p=2) shall prescribe, but in no event shall the total term of the loan from the date of the refinance or [modification](/usc/42/7501.md?p=4) exceed 40 years.
  - (3)
    - (A) Notwithstanding any other provision of this subchapter, a loan may be made under this section for the purchase of a dwelling located on land owned by a [community land trust](#a-3-B), if the borrower and the loan otherwise meet the requirements applicable to loans under this section.
    - (B) For purposes of this paragraph, the term “community land trust” means a community [housing](/usc/42/1490p–2.md?p=r-3) development organization as such term is defined in [section 12704 of this title](/usc/42/12704.md) (except that the requirements under [section 12704(6)(C) of this title](/usc/42/12704.md?p=6-C) and [section 12704(6)(D) of this title](/usc/42/12704.md?p=6-D) shall not apply for purposes of this paragraph)—
      - (i) that is not sponsored by a for-profit organization;
      - (ii) that is established to carry out the activities under [clause (iii)](#a-3-B-iii);
      - (iii) that—
        - (I) acquires parcels of land, held in perpetuity, primarily for conveyance under long-term ground leases;
        - (II) transfers ownership of any structural improvements located on such leased parcels to the lessees; and
        - (III) retains a preemptive option to purchase any such structural improvement at a price determined by formula that is designed to ensure that the improvement remains affordable to low- and moderate-[income](/usc/42/1471.md?p=b-5-A) [families](/usc/42/12704.md?p=11) in perpetuity; and
      - (iv) that has its corporate membership open to any adult resident of a particular [geographic area](/usc/42/11360.md?p=9) specified in the bylaws of the organization.
- (b) **Provisions of loan instrument—** The instruments under which the loan is made and the security given shall—
  - (1) provide for security upon the applicant’s equity in the farm or such other security or collateral, if any, as may be found necessary by the [Secretary](/usc/42/242q–4.md?p=2) reasonably to assure repayment of the indebtedness;
  - (2) provide for the repayment of principal and interest in accordance with schedules and repayment plans prescribed by the [Secretary](/usc/42/242q–4.md?p=2), except that any prepayment of a loan made or insured under section [1484](/usc/42/1484.md) or [1485](/usc/42/1485.md) of this title shall be subject to the provisions of [subsection (c)](#c);
  - (3) except for guaranteed loans, contain the [agreement](/usc/42/1320b–8.md?p=a-3-A) of the borrower that he will, at the request of the [Secretary](/usc/42/242q–4.md?p=2), proceed with diligence to refinance the balance of the indebtedness through cooperative or other responsible private credit sources whenever the [Secretary](/usc/42/242q–4.md?p=2) determines, in the light of the borrower’s circumstances, including his earning capacity and the [income](/usc/42/1471.md?p=b-5-A) from the farm, that he is able to do so upon reasonable terms and conditions;
  - (4) be in such form and contain such covenants as the [Secretary](/usc/42/242q–4.md?p=2) shall prescribe to secure the payment of the loan with interest, protect the security, and assure that the farm will be maintained in [repair](/usc/42/1471.md?p=a-5) and that waste and exhaustion of the farm will be prevented.
- (c) **Prepayment and refinancing provisions—**
  - (1)
    - (A) The [Secretary](/usc/42/242q–4.md?p=2) may not accept an offer to prepay, or request refinancing in accordance with [subsection (b)(3)](#b-3) of, any loan made or insured under section [1484](/usc/42/1484.md) or [1485](/usc/42/1485.md) of this title pursuant to a contract entered into after December 21, 1979, but before December 15, 1989, unless the [Secretary](/usc/42/242q–4.md?p=2) takes appropriate action which will obligate the borrower (and successors in interest thereof) to utilize the assisted [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) for the purposes specified in section [1484](/usc/42/1484.md) or [1485](/usc/42/1485.md) of this title, as the case may be, for a period of—
      - (i) fifteen years from the date on which the loan was made in the case of a loan made or insured pursuant to a contract entered into after December 21, 1979, but before December 15, 1989, and utilized for [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) which have not received assistance under section [1490a(a)(1)(B)](/usc/42/1490a.md?p=a-1-B), [(a)(2)](/usc/42/1490a.md?p=a-2), or [(5)](/usc/42/1490a.md?p=a-5) of this title or [section 1437f of this title](/usc/42/1437f.md); or
      - (ii) twenty years from the date on which the loan was made in the case of any other such loan;

      or until the [Secretary](/usc/42/242q–4.md?p=2) determines (prior to the end of such period) that there is no longer a need for such [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) to be so utilized or that Federal or other financial assistance provided to the residents of such [housing](/usc/42/1490p–2.md?p=r-3) will no longer be provided.

    - (B) The [Secretary](/usc/42/242q–4.md?p=2) may not accept an offer to prepay, or request refinancing in accordance with [subsection (b)(3)](#b-3) of, any initial loan made or insured under [section 1485 of this title](/usc/42/1485.md) pursuant to a contract entered into on or after December 15, 1989.
  - (2) If any loan which was made or insured under section [1484](/usc/42/1484.md) or [1485](/usc/42/1485.md) of this title pursuant to a contract entered into prior to December 15, 1989, is prepaid or refinanced on or after October 8, 1980, and tenants of the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) financed with such loan are displaced due to a change in the use of the [housing](/usc/42/1490p–2.md?p=r-3), or to an increase in rental or other charges, as a result of such prepayment or refinancing, the [Secretary](/usc/42/242q–4.md?p=2) shall provide such tenants a priority for relocation in alternative [housing](/usc/42/1490p–2.md?p=r-3) assisted pursuant to this subchapter.
  - (3) **Notice of offer to prepay.—** Not less than 30 days after receiving an offer to prepay any loan made or insured under section [1484](/usc/42/1484.md) or [1485](/usc/42/1485.md) of this title, the [Secretary](/usc/42/242q–4.md?p=2) shall provide written notice of the offer or request to the tenants of the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) involved, to interested nonprofit organizations, and to any appropriate [State](/usc/42/201.md?p=f) and local agencies.
  - (4)
    - (A) **Agreement by borrower to extend low income use.—** Before accepting any offer to prepay, or requesting refinancing in accordance with [subsection (b)(3)](#b-3) of, any loan made or insured under section [1484](/usc/42/1484.md) or [1485](/usc/42/1485.md) of this title pursuant to a contract entered into prior to December 15, 1989, the [Secretary](/usc/42/242q–4.md?p=2) shall make reasonable efforts to enter into an [agreement](/usc/42/1320b–8.md?p=a-3-A) with the borrower under which the borrower will make a binding commitment to extend the [low income](/usc/42/701.md?p=b-2) use of the assisted [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) involved for not less than the 20-year period beginning on the date on which the [agreement](/usc/42/1320b–8.md?p=a-3-A) is executed.
    - (B) **Assistance available to borrower to extend low income use.—** To the extent of amounts provided in appropriation Acts, the [agreement](/usc/42/1320b–8.md?p=a-3-A) under [subparagraph (A)](#c-4-A) may provide for 1 or more of the following forms of assistance that the [Secretary](/usc/42/242q–4.md?p=2), after taking into account local market conditions, determines to be necessary to extend the [low income](/usc/42/701.md?p=b-2) use of the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) involved:
      - (i) Increase in the rate of return on investment.
      - (ii) Reduction of the interest rate on the loan through the provision of interest credits under [section 1490a(a)(1)(B) of this title](/usc/42/1490a.md?p=a-1-B), or additional assistance or an increase in assistance provided under [section 1490a(a)(5) of this title](/usc/42/1490a.md?p=a-5).
      - (iii) Additional rental assistance, or an increase in assistance provided under existing contracts, under section [1490a(a)(2)](/usc/42/1490a.md?p=a-2) or [1490a(a)(5)](/usc/42/1490a.md?p=a-5) of this title or under [section 1437f of this title](/usc/42/1437f.md).
      - (iv) An equity loan to the borrower under paragraphs (1) and (2) of [section 1485(c) of this title](/usc/42/1485.md?p=c) or under paragraphs [(1)](/usc/42/1484.md?p=j-1) and [(2)](/usc/42/1484.md?p=j-2) of section 1484(j)[^1] of this title, except that an equity loan referred to in this clause may not be made available after August 6, 1996, unless the [Secretary](/usc/42/242q–4.md?p=2) determines that the other incentives available under this subparagraph are not adequate to provide a fair return on the investment of the borrower, to prevent prepayment of the loan insured under section [1484](/usc/42/1484.md) or [1485](/usc/42/1485.md) of this title, or to prevent the displacement of tenants of the [housing](/usc/42/1490p–2.md?p=r-3) for which the loan was made.
      - (v) Incremental rental assistance in connection with loans under clauses [(ii)](#c-4-B-ii) and [(iv)](#c-4-B-iv) to the extent necessary to avoid increases in the rental payments of current tenants not receiving rental assistance under [section 1490a(a)(2) of this title](/usc/42/1490a.md?p=a-2) or under [section 1437f of this title](/usc/42/1437f.md), or current tenants of [projects](/usc/42/11360.md?p=20) not assisted under [section 1490a(a)(5) of this title](/usc/42/1490a.md?p=a-5).
      - (vi) In the case of a [project](/usc/42/11360.md?p=20) that has received rental assistance under [section 1437f of this title](/usc/42/1437f.md), permitting the [owner](/usc/42/1471.md?p=b-2) to receive rent in excess of the amount determined necessary by the [Secretary](/usc/42/242q–4.md?p=2) to defray the cost of long-term [repair](/usc/42/1471.md?p=a-5) or maintenance of such a [project](/usc/42/11360.md?p=20).
    - (C) **Approval of assistance.—** The [Secretary](/usc/42/242q–4.md?p=2) may approve assistance under [subparagraph (B)](#c-4-B) for assisted [housing](/usc/42/1490p–2.md?p=r-3) only if the restrictive period has expired for any loan for the [housing](/usc/42/1490p–2.md?p=r-3) made or insured under section [1484](/usc/42/1484.md) or [1485](/usc/42/1485.md) of this title pursuant to a contract entered into after December 21, 1979, but before December 15, 1989, and the [Secretary](/usc/42/242q–4.md?p=2) determines that the combination of assistance provided—
      - (i) is necessary to provide a fair return on the investment of the borrower; and
      - (ii) is the least costly alternative for the Federal Government that is consistent with carrying out the purposes of this subsection.
  - (5)
    - (A) **Offer to sell to nonprofit organizations and public agencies.—**
      - (i) **In general.—** If the [Secretary](/usc/42/242q–4.md?p=2) determines after a reasonable period that an [agreement](/usc/42/1320b–8.md?p=a-3-A) will not be entered into with a borrower under [paragraph (4)](#c-4), the [Secretary](/usc/42/242q–4.md?p=2) shall require the borrower (except as provided in [subparagraph (G)](#c-5-G)) to offer to sell the assisted [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) involved to any qualified [nonprofit organization](#c-5-I-ii) or [public agency](/usc/42/11851.md?p=8) at a fair market value determined by 2 independent appraisers, one of whom shall be selected by the [Secretary](/usc/42/242q–4.md?p=2) and one of whom shall be selected by the borrower. If the 2 appraisers fail to agree on the fair market value, the [Secretary](/usc/42/242q–4.md?p=2) and the borrower shall jointly select a third appraiser, whose appraisal shall be binding on the [Secretary](/usc/42/242q–4.md?p=2) and the borrower.
      - (ii) **Period for which requirement applicable.—** If, upon the expiration of 180 days after an offer is made to sell [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) under [clause (i)](#c-5-A-i), no qualified [nonprofit organization](#c-5-I-ii) or [public agency](/usc/42/11851.md?p=8) has made a bona fide offer to purchase, the [Secretary](/usc/42/242q–4.md?p=2) may accept the offer to prepay, or may request refinancing in accordance with [subsection (b)(3)](#b-3) of, the loan. This clause shall apply only when [funds](/usc/42/12854.md?p=3) are available for purposes of carrying out a transfer under this paragraph.
    - (B) **Qualified nonprofit organizations and public agencies.—**
      - (i) **Local nonprofit organization or public agency.—** A [local nonprofit organization](#c-5-I-i) or [public agency](/usc/42/11851.md?p=8) may purchase [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) under this paragraph only if—
        - (I) the organization or agency is determined by the [Secretary](/usc/42/242q–4.md?p=2) to be capable of managing the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) (either directly or through a contract) for the remaining useful life of the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2); and
        - (II) the organization or agency has entered into an [agreement](/usc/42/1320b–8.md?p=a-3-A) that obligates it (and successors in interest thereof) to maintain the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) as affordable for [very low-income families or persons](/usc/42/1471.md?p=b-4) and [low income families or persons](/usc/42/1471.md?p=b-4) for the remaining useful life of the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2).
      - (ii) **National or regional nonprofit organization.—** If the [Secretary](/usc/42/242q–4.md?p=2) determines that there is no [local nonprofit organization](#c-5-I-i) or [public agency](/usc/42/11851.md?p=8) qualified to purchase the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) involved, the [Secretary](/usc/42/242q–4.md?p=2) shall require the borrower to offer to sell the assisted [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) to an existing qualified national or regional [nonprofit organization](#c-5-I-ii).
      - (iii) **Selection of qualified purchaser.—** The [Secretary](/usc/42/242q–4.md?p=2) shall promulgate regulations that establish criteria for selecting a qualified [nonprofit organization](#c-5-I-ii) or [public agency](/usc/42/11851.md?p=8) to purchase [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) when more than 1 such organization or agency has made a bona fide offer. Such regulations shall give a priority to those organizations or agencies with the greatest experience in developing or managing [low income](/usc/42/701.md?p=b-2) [housing](/usc/42/1490p–2.md?p=r-3) or community development [projects](/usc/42/11360.md?p=20) and with the longest record of service to the community.
    - (C) **Financing of sale.—** To facilitate the sale described in [subparagraph (A)](#c-5-A), the [Secretary](/usc/42/242q–4.md?p=2) shall—
      - (i) to the extent provided in appropriation Acts, make an advance to the [nonprofit organization](#c-5-I-ii) or [public agency](/usc/42/11851.md?p=8) whose offer to purchase is accepted under this paragraph to cover any direct costs (other than the purchase price) incurred by the organization or agency in purchasing and assuming responsibility for the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) involved;
      - (ii) approve the assumption, by the [nonprofit organization](#c-5-I-ii) or [public agency](/usc/42/11851.md?p=8) involved, of the loan made or insured under section [1484](/usc/42/1484.md) or [1485](/usc/42/1485.md) of this title;
      - (iii) to the extent provided in appropriation Acts, transfer any rental assistance payments that are received under [section 1490a(a)(2)(A) of this title](/usc/42/1490a.md?p=a-2-A) or under [section 1437f of this title](/usc/42/1437f.md), or any assistance payments received under [section 1490a(a)(5) of this title](/usc/42/1490a.md?p=a-5), with respect to the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) involved; and
      - (iv) to the extent provided in appropriation Acts, provide a loan under [section 1485(c)(3) of this title](/usc/42/1485.md?p=c-3) to the [nonprofit organization](#c-5-I-ii) or [public agency](/usc/42/11851.md?p=8) whose offer to purchase is accepted under this paragraph to enable the organization or agency to purchase the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) involved.
    - (D) **Rent limitation and assistance.—** The [Secretary](/usc/42/242q–4.md?p=2) shall, to the extent provided in appropriation Acts, provide to each [nonprofit organization](#c-5-I-ii) or [public agency](/usc/42/11851.md?p=8) purchasing [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) under this paragraph financial assistance (in the form of monthly payments or forgiveness of debt) in an amount necessary to ensure that the monthly rent payment made by each [low income](/usc/42/701.md?p=b-2) [family](/usc/42/290ff–4.md?p=d-2) or [person](/usc/42/1320a–7k.md?p=d-4-C-i) residing in the [housing](/usc/42/1490p–2.md?p=r-3) does not exceed the maximum rent permitted under [section 1490a(a)(2)(A) of this title](/usc/42/1490a.md?p=a-2-A) or, in the case of [housing](/usc/42/1490p–2.md?p=r-3) assisted under [section 1490a(a)(5) of this title](/usc/42/1490a.md?p=a-5), does not exceed the rents established for the [project](/usc/42/11360.md?p=20) under such section.
    - (E) **Restriction on subsequent transfers.—** Except as provided in [subparagraph (B)(ii)](#c-5-B-ii), the [Secretary](/usc/42/242q–4.md?p=2) may not approve the transfer of any [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) purchased under this paragraph during the remaining useful life of the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2), unless the [Secretary](/usc/42/242q–4.md?p=2) determines that—
      - (i) the transfer will further the provision of [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) for [low income families or persons](/usc/42/1471.md?p=b-4); or
      - (ii) there is no longer a need for such [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) by [low income families or persons](/usc/42/1471.md?p=b-4).
    - (F) **General restriction on prepayments and refinancings.—** Following the transfer of the maximum number of dwelling [units](/usc/42/1395w–114b.md?p=g-2) set forth in [subparagraph (H)(i)](#c-5-H-i) in any fiscal year or the maximum number of dwelling [units](/usc/42/1395w–114b.md?p=g-2) for which budget authority is available in any fiscal year, the [Secretary](/usc/42/242q–4.md?p=2) may not accept in such fiscal year any offer to prepay, or request refinancing in accordance with [subsection (b)(3)](#b-3) of, any loan made or insured under section [1484](/usc/42/1484.md) or [1485](/usc/42/1485.md) of this title pursuant to a contract entered into prior to December 15, 1989, except in accordance with [subparagraph (G)](#c-5-G). The limitation established in this subparagraph shall not apply to an offer to prepay, or request to refinance, if, following the date on which such offer or request is made (or following February 5, 1988, whichever occurs later) a 15-month period expires during which no budget authority is available to carry out this paragraph. For purposes of this subparagraph, the [Secretary](/usc/42/242q–4.md?p=2) shall allocate budget authority under this paragraph in the order in which offers to prepay, or request to refinance, are made.
    - (G) **Exception.—** This paragraph shall not apply to any offer to prepay, or any request to refinance in accordance with [subsection (b)(3)](#b-3), any loan made or insured under section [1484](/usc/42/1484.md) or [1485](/usc/42/1485.md) of this title pursuant to a contract entered into prior to December 15, 1989, if—
      - (i) the borrower enters into an [agreement](/usc/42/1320b–8.md?p=a-3-A) with the [Secretary](/usc/42/242q–4.md?p=2) that obligates the borrower (and successors in interest thereof)—
        - (I) to utilize the assisted [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) for the purposes specified in section [1484](/usc/42/1484.md) or [1485](/usc/42/1485.md) of this title, as the case may be, for a period determined by the [Secretary](/usc/42/242q–4.md?p=2) (but not less than the period described in [paragraph (1)(B)](#c-1-B) calculated from the date on which the loan is made or insured); and
        - (II) upon termination of the period described in [paragraph (1)(B)](#c-1-B), to offer to sell the assisted [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) to a qualified [nonprofit organization](#c-5-I-ii) or [public agency](/usc/42/11851.md?p=8) in accordance with this paragraph; or
      - (ii) the [Secretary](/usc/42/242q–4.md?p=2) determines that [housing](/usc/42/1490p–2.md?p=r-3) opportunities of [minorities](/usc/42/299a–1.md?p=d-2) will not be materially affected as a result of the prepayment or refinancing, and that—
        - (I) the borrower (and any successor in interest thereof) are obligated to ensure that tenants of the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) financed with the loan will not be displaced due to a change in the use of the [housing](/usc/42/1490p–2.md?p=r-3), or to an increase in rental or other charges, as a result of the prepayment or refinancing; or
        - (II) there is an adequate supply of safe, decent, and affordable rental [housing](/usc/42/1490p–2.md?p=r-3) within the market area of the [housing](/usc/42/1490p–2.md?p=r-3) and [related facilities](/usc/42/1486.md?p=g-2) and sufficient actions have been taken to ensure that the rental [housing](/usc/42/1490p–2.md?p=r-3) will be made available to each tenant upon displacement.
    - (H) **Funding.—**
      - (i) **Budget limitation.—** Not more than 5,000 dwelling [units](/usc/42/1395w–114b.md?p=g-2) may be transferred under this paragraph in any fiscal year, and the budget authority that may be provided under this paragraph for any fiscal year may not exceed the amounts required to carry out this paragraph with respect to such number.
      - (ii) **Reimbursement of rural housing insurance fund.—** There are authorized to be appropriated to the Rural [Housing](/usc/42/1490p–2.md?p=r-3) Insurance [Fund](/usc/42/12854.md?p=3) such sums as may be necessary to reimburse the [Fund](/usc/42/12854.md?p=3) for financial assistance provided under this paragraph, [paragraph (4)](#c-4), and [section 1487(j)(7) of this title](/usc/42/1487.md?p=j-7).
    - (I) **Definitions.—** For purposes of this paragraph:
      - (i) **Local nonprofit organization.—** The term “local nonprofit organization” means a [nonprofit organization](#c-5-I-ii) that—
        - (I) has a broad based [board](/usc/42/10261.md?p=2) reflecting various interests in the community or trade area; and
        - (II) is a not-for-profit charitable organization whose principal purposes include developing or managing [low income](/usc/42/701.md?p=b-2) [housing](/usc/42/1490p–2.md?p=r-3) or community development [projects](/usc/42/11360.md?p=20).
      - (ii) **Nonprofit organization.—** The term “nonprofit organization” means any private organization—
        - (I) no part of the net earnings of which inures to the benefit of any member, founder, contributor, or individual;
        - (II) that is approved by the [Secretary](/usc/42/242q–4.md?p=2) as to financial responsibility; and
        - (III) that does not have among its officers or directorate [persons](/usc/42/1320a–7k.md?p=d-4-C-i) or parties with a material interest (or [persons](/usc/42/1320a–7k.md?p=d-4-C-i) or parties related to any [person](/usc/42/1320a–7k.md?p=d-4-C-i) or party with such an interest) in loans financed under [section 1485 of this title](/usc/42/1485.md) that have been prepaid.
    - (J) **Regulations.—** Notwithstanding [section 1490n of this title](/usc/42/1490n.md), the [Secretary](/usc/42/242q–4.md?p=2) shall issue final regulations to carry out this paragraph not later than 60 days after February 5, 1988. The [Secretary](/usc/42/242q–4.md?p=2) shall provide for the regulations to take effect not later than 45 days after the date on which the regulations are issued.
- (d) **Dwelling units available to very low-income families or persons—** On and after November 30, 1983—
  - (1) not less than 40 percent of the [funds](/usc/42/12854.md?p=3) approved in appropriation Acts for use under this section shall be set aside and made available only for [very low-income families or persons](/usc/42/1471.md?p=b-4); and
  - (2) not less than 30 percent of the [funds](/usc/42/12854.md?p=3) allocated to each [State](/usc/42/201.md?p=f) under this section shall be available only for [very low-income families or persons](/usc/42/1471.md?p=b-4).
- (e) **Manufactured homes; qualifications for loans made or insured; energy conservation requirements—**
  - (1) A loan which may be made or insured under this section with respect to [housing](/usc/42/1490p–2.md?p=r-3) shall be made or insured with respect to a manufactured home or with respect to a manufactured home and lot, whether such home or such home and lot is real property, personal property, or mixed real and personal property, if—
    - (A) the manufactured home meets the [standards](/usc/42/1320d.md?p=7) prescribed pursuant to title VI of the [Housing](/usc/42/1490p–2.md?p=r-3) and Community Development Act of 1974 [[42 U.S.C. 5401](/usc/42/5401.md) et seq.];
    - (B) the manufactured home, or the manufactured home and lot, meets the installation, structural, and site requirements which would apply under title II of the National Housing Act [[12 U.S.C. 1707](/usc/12/1707.md) et seq.]; and
    - (C) the manufactured home meets the [energy](/usc/42/6311.md?p=7) conserving requirements established under [paragraph (2)](#e-2), or until the [energy](/usc/42/6311.md?p=7) conserving requirements are established under [paragraph (2)](#e-2), the manufactured home meets the [energy](/usc/42/6311.md?p=7) conserving requirements applicable to [housing](/usc/42/1490p–2.md?p=r-3) other than manufactured [housing](/usc/42/1490p–2.md?p=r-3) financed under this subchapter.
  - (2) [Energy](/usc/42/6311.md?p=7) conserving requirements established by the [Secretary](/usc/42/242q–4.md?p=2) for the purpose of [paragraph (1)(C)](#e-1-C) shall—
    - (A) reduce the operating costs for a borrower by maximizing the [energy](/usc/42/6311.md?p=7) savings and be [cost-effective](/usc/42/1396e.md?p=e-2) over the life of the manufactured home or the term of the loan, whichever is shorter, taking into account variations in climate, types of energy used, the cost to modify the home to meet such requirements, and the estimated value of the [energy](/usc/42/6311.md?p=7) saved over the term of the [mortgage](/usc/42/1471.md?p=b-2); and
    - (B) be established so that the increase in the annual loan payment resulting from the added [energy](/usc/42/6311.md?p=7) conserving requirements in excess of those required by the [standards](/usc/42/1320d.md?p=7) prescribed under title VI of the [Housing](/usc/42/1490p–2.md?p=r-3) and Community Development Act of 1974 [[42 U.S.C. 5401](/usc/42/5401.md) et seq.] shall not exceed the projected savings in annual [energy](/usc/42/6311.md?p=7) costs.
  - (3) A loan that may be made or insured under this section with respect to a manufactured home on a permanent [foundation](/usc/42/17351.md?p=3), or a manufactured home on a permanent [foundation](/usc/42/17351.md?p=3) and a lot, shall be repayable over the same period as would be applicable under section 203(b) of the National Housing Act [[12 U.S.C. 1709(b)](/usc/12/1709.md?p=b)].
- (f) **Remote rural areas—**
  - (1) **Loan supplements—** The [Secretary](/usc/42/242q–4.md?p=2) may supplement any loan under this section to finance [housing](/usc/42/1490p–2.md?p=r-3) located in a remote rural area or on tribal allotted or [Indian](/usc/42/6862.md?p=6) [trust](/usc/42/12854.md?p=6) land with a grant in an amount not greater than the amount by which the reasonable land acquisition and [construction](/usc/42/7479.md?p=2-C) costs of the security property exceeds the appraised value of such property.
  - (2) **Prohibition—** The [Secretary](/usc/42/242q–4.md?p=2) may not refuse to make, insure, or guarantee a loan that otherwise meets the requirements under this section solely on the basis that the [housing](/usc/42/1490p–2.md?p=r-3) involved is located in an area that is excessively rural in character or excessively remote or on tribal allotted or [Indian](/usc/42/6862.md?p=6) [trust](/usc/42/12854.md?p=6) land.
- (g) **Deferred mortgage demonstration—**
  - (1) **Authority—** With respect to [families](/usc/42/12704.md?p=11) or [persons](/usc/42/1320a–7k.md?p=d-4-C-i) otherwise eligible for assistance under [subsection (d)](#d) but having [incomes](/usc/42/1471.md?p=b-5-A) below the amount determined to qualify for a loan under this section, the [Secretary](/usc/42/242q–4.md?p=2) may defer [mortgage](/usc/42/1471.md?p=b-2) payments beyond the amount affordable at 1 percent interest, taking into consideration [income](/usc/42/1471.md?p=b-5-A), taxes and insurance. Deferred [mortgage](/usc/42/1471.md?p=b-2) payments shall be converted to payment status when the ability of the borrower to repay improves. Deferred amounts shall not exceed 25 percent of the amount of the payment due at 1 percent interest and shall be subject to recapture.
  - (2) **Interest—** Interest on principal deferred shall be set at 1 percent and any interest payments deferred under this subsection shall not be treated as principal in calculating indebtedness.
  - (3) **Funding—** Subject to approval in appropriations Acts, not more than 10 percent of the amount approved for each of fiscal years 1993 and 1994 for loans under this section may be used to carry out this subsection.
- (h) **Doug Bereuter section 502 single family housing loan guarantee program—**
  - (1) **Short title—** This subsection may be cited as the “Doug Bereuter [Section 502](/usc/42/502.md) [Single Family](/usc/42/2304.md?p=m) [Housing](/usc/42/1490p–2.md?p=r-3) Loan Guarantee Act”.
  - (2) **Authority—** The [Secretary](/usc/42/242q–4.md?p=2) shall, to the extent provided in appropriation Acts, provide guaranteed loans in accordance with this section, [section 1487(d) of this title](/usc/42/1487.md?p=d), and the last sentence of [section 1490a(a)(1)(A) of this title](/usc/42/1490a.md?p=a-1-A), except as [modified](/usc/42/7501.md?p=4) by the provisions of this subsection. Loans shall be guaranteed under this subsection in an amount equal to 90 percent of the loan.
  - (3) **Eligible borrowers—** Loans guaranteed pursuant to this subsection shall be made only to borrowers who are low or moderate [income](/usc/42/1471.md?p=b-5-A) [families](/usc/42/12704.md?p=11) or [persons](/usc/42/1320a–7k.md?p=d-4-C-i), whose [incomes](/usc/42/1471.md?p=b-5-A) do not exceed 115 percent of the median [income](/usc/42/1471.md?p=b-5-A) of the area, as determined by the [Secretary](/usc/42/242q–4.md?p=2).
  - (4) **Eligible housing—**
    - (A) **Definition—** In this paragraph, the term “accessory dwelling unit” means a [single](/usc/42/2304.md?p=m), habitable living [unit](/usc/42/1395w–114b.md?p=g-2)—
      - (i) with means of separate ingress and egress;
      - (ii) that is usually subordinate in size;
      - (iii) that can be added to, created within, or detached from a primary 1-[unit](/usc/42/1395w–114b.md?p=g-2), [single](/usc/42/2304.md?p=m)-[family](/usc/42/290ff–4.md?p=d-2) dwelling; and
      - (iv) in combination with a primary 1-[unit](/usc/42/1395w–114b.md?p=g-2), [single](/usc/42/2304.md?p=m)-[family](/usc/42/290ff–4.md?p=d-2) dwelling, constitutes a [single](/usc/42/2304.md?p=m) interest in real estate.
    - (B) **Single-family requirement—** Loans may be guaranteed pursuant to this subsection only if the loan is used to acquire or construct a [single](/usc/42/2304.md?p=m)-[family](/usc/42/290ff–4.md?p=d-2) residence that is—
      - (i) to be used as the principal residence of the borrower;
      - (ii) eligible for assistance under this section, section 203(b) of the National Housing Act [[12 U.S.C. 1709(b)](/usc/12/1709.md?p=b)], or [chapter 37](/usc/38/chptIII-ch37.md) of title 38; and
      - (iii) located in a rural area.
    - (C) **Rule of construction—** Nothing in this paragraph shall be construed to prohibit the leasing of an [accessory dwelling unit](#h-4-A) or the use of rental [income](/usc/42/1471.md?p=b-5-A) derived from such a lease to qualify for a loan guaranteed under this subsection—
      - (i) after July 11, 2026; and
      - (ii) if the property that is the subject of the loan was constructed before July 11, 2026.
  - (5) **Priority and counseling for first-time homebuyers—**
    - (A) In providing guaranteed loans under this subsection, the [Secretary](/usc/42/242q–4.md?p=2) shall give priority to [first-time homebuyers](#h-17-B) (as defined in [paragraph (17)](#h-17)).
    - (B) The [Secretary](/usc/42/242q–4.md?p=2) may require that, as a condition of receiving a guaranteed loan pursuant to this subsection, a borrower who is a [first-time homebuyer](#h-17-B) successfully complete a [program](/usc/42/274l–1.md?p=4) of homeownership counseling under [section 1701x(a)(1)(iii) of title 12](/usc/12/1701x.md?p=a-1-iii) and obtain certification from the provider of the [program](/usc/42/274l–1.md?p=4) that the borrower is adequately prepared for the obligations of homeownership.
  - (6) **Eligible lenders—** Guaranteed loans pursuant to this subsection may be made only by lenders approved by and meeting qualifications established by the [Secretary](/usc/42/242q–4.md?p=2).
  - (7) **Loan terms—** Loans guaranteed pursuant to this subsection shall—
    - (A) be made for a term not to exceed 30 years;
    - (B) involve a rate of interest that is fixed over the term of the loan and does not exceed the rate for loans guaranteed under [chapter 37](/usc/38/chptIII-ch37.md) of title 38 or comparable loans in the area that are not guaranteed; and
    - (C) involve a principal obligation (including initial service charges, appraisal, [inspection](/usc/42/4851b.md?p=12), and other fees as the [Secretary](/usc/42/242q–4.md?p=2) may approve)—
      - (i) for a [first-time homebuyer](#h-17-B), in any amount not in excess of 100 percent of the appraised value of the property as of the date the loan is accepted or the acquisition cost of the property, whichever is less, plus the guarantee fee as authorized by [subsection (h)(7)](#h-7);[^2] and
      - (ii) for any borrower other than a [first-time homebuyer](#h-17-B), in an amount not in excess of the percentage of the property or the acquisition cost of the property that the [Secretary](/usc/42/242q–4.md?p=2) shall determine, such percentage or cost in any event not to exceed 100 percent of the appraised value of the property as of the date the loan is accepted or the acquisition cost of the property, whichever is less, plus the guarantee fee as authorized by [subsection (h)(7)](#h-7).[^2]
  - (8) **Fees—** Notwithstanding [paragraph (14)(D)](#h-14-D), with respect to a guaranteed loan issued or [modified](/usc/42/7501.md?p=4) under this subsection, the [Secretary](/usc/42/242q–4.md?p=2) may collect from the lender—
    - (A) at the time of issuance of the guarantee or [modification](/usc/42/7501.md?p=4), a fee not to exceed 3.5 percent of the principal obligation of the loan; and
    - (B) an annual fee not to exceed 0.5 percent of the outstanding principal balance of the loan for the life of the loan.
  - (9) **Refinancing—** Any guaranteed loan under this subsection may be refinanced and extended in accordance with terms and conditions that the [Secretary](/usc/42/242q–4.md?p=2) shall prescribe, but in no event for an additional amount or term which exceeds the limitations under this subsection.
  - (10) **Transfer and assumption—** Upon the transfer of property for which a guaranteed loan under this subsection was made, and the assumption of the guaranteed loan by an approved eligible borrower, the original borrower of a guaranteed loan under this subsection shall be relieved of liability with respect to the loan.
  - (11) **Geographical targeting—** In providing guaranteed loans under this subsection, the [Secretary](/usc/42/242q–4.md?p=2) shall establish [standards](/usc/42/1320d.md?p=7) to target and give priority to areas that have a demonstrated need for additional sources of [mortgage](/usc/42/1471.md?p=b-2) financing for low and moderate [income](/usc/42/1471.md?p=b-5-A) [families](/usc/42/12704.md?p=11).
  - (12) **Allocation—** The [Secretary](/usc/42/242q–4.md?p=2) shall provide that, in each fiscal year, guaranteed loans under this subsection shall be allocated among the [States](#h-17-D) on the basis of the need of eligible borrowers in each [State](#h-17-D) for such loans in comparison with the need of eligible borrowers for such loans among all [States](#h-17-D).
  - (13) **Loss mitigation—** Upon default or imminent default of any [mortgage](/usc/42/1471.md?p=b-2) guaranteed under this subsection, mortgagees shall engage in loss mitigation actions for the purpose of providing an alternative to foreclosure (including actions such as special forbearance, loan [modification](/usc/42/7501.md?p=4), pre-foreclosure sale, deed in lieu of foreclosure, as required, support for borrower [housing](/usc/42/1490p–2.md?p=r-3) counseling, subordinate lien resolution, and borrower relocation), as provided for by the [Secretary](/usc/42/242q–4.md?p=2).
  - (14) **Payment of partial claims and mortgage modifications—** The [Secretary](/usc/42/242q–4.md?p=2) may authorize the [modification](/usc/42/7501.md?p=4) of [mortgages](/usc/42/1471.md?p=b-2), and establish a [program](/usc/42/274l–1.md?p=4) for payment of a partial [claim](/usc/42/1320a–7a.md?p=i-2) to a mortgagee that agrees to apply the [claim](/usc/42/1320a–7a.md?p=i-2) amount to payment of a [mortgage](/usc/42/1471.md?p=b-2) on a 1- to 4-[family](/usc/42/290ff–4.md?p=d-2) residence, for [mortgages](/usc/42/1471.md?p=b-2) that are in default or face imminent default, as defined by the [Secretary](/usc/42/242q–4.md?p=2). Any payment under such [program](/usc/42/274l–1.md?p=4) directed to the mortgagee shall be made at the sole discretion of the [Secretary](/usc/42/242q–4.md?p=2) and on terms and conditions acceptable to the [Secretary](/usc/42/242q–4.md?p=2), except that—
    - (A) the amount of the partial [claim](/usc/42/1320a–7a.md?p=i-2) payment shall be in an amount determined by the [Secretary](/usc/42/242q–4.md?p=2), and shall not exceed an amount equivalent to 30 percent of the unpaid principal balance of the [mortgage](/usc/42/1471.md?p=b-2) and any costs that are approved by the [Secretary](/usc/42/242q–4.md?p=2);
    - (B) the amount of the partial [claim](/usc/42/1320a–7a.md?p=i-2) payment shall be applied first to any outstanding indebtedness on the [mortgage](/usc/42/1471.md?p=b-2), including any arrearage, but may also include principal reduction;
    - (C) the mortgagor shall agree to repay the amount of the partial [claim](/usc/42/1320a–7a.md?p=i-2) to the [Secretary](/usc/42/242q–4.md?p=2) upon terms and conditions acceptable to the [Secretary](/usc/42/242q–4.md?p=2);
    - (D) expenses related to a partial [claim](/usc/42/1320a–7a.md?p=i-2) or [modification](/usc/42/7501.md?p=4) are not to be charged to the borrower;
    - (E) the [Secretary](/usc/42/242q–4.md?p=2) may authorize compensation to the mortgagee for lost [income](/usc/42/1471.md?p=b-5-A) on monthly [mortgage](/usc/42/1471.md?p=b-2) payments due to interest rate reduction;
    - (F) the [Secretary](/usc/42/242q–4.md?p=2) may reimburse the mortgagee from the appropriate guaranty [fund](/usc/42/12854.md?p=3) in connection with any activities that the mortgagee is required to undertake concerning repayment by the mortgagor of the amount owed to the [Secretary](/usc/42/242q–4.md?p=2);
    - (G) the [Secretary](/usc/42/242q–4.md?p=2) may authorize payments to the mortgagee on behalf of the borrower, under such terms and conditions as are defined by the [Secretary](/usc/42/242q–4.md?p=2), based on successful performance under the terms of the [mortgage](/usc/42/1471.md?p=b-2) [modification](/usc/42/7501.md?p=4), which shall be used to reduce the principal obligation under the [modified](/usc/42/7501.md?p=4) [mortgage](/usc/42/1471.md?p=b-2); and
    - (H) the [Secretary](/usc/42/242q–4.md?p=2) may authorize the [modification](/usc/42/7501.md?p=4) of [mortgages](/usc/42/1471.md?p=b-2) with terms extended up to 40 years from the date of [modification](/usc/42/7501.md?p=4).
  - (15) **Assignment—**
    - (A) **Program authority—** The [Secretary](/usc/42/242q–4.md?p=2) may establish a [program](/usc/42/274l–1.md?p=4) for assignment to the [Secretary](/usc/42/242q–4.md?p=2), upon request of the mortgagee, of a [mortgage](/usc/42/1471.md?p=b-2) on a 1- to 4-[family](/usc/42/290ff–4.md?p=d-2) residence guaranteed under this chapter.[^1]
    - (B) **Program requirements—**
      - (i) **In general—** The [Secretary](/usc/42/242q–4.md?p=2) may encourage loan [modifications](/usc/42/7501.md?p=4) for eligible delinquent [mortgages](/usc/42/1471.md?p=b-2) or [mortgages](/usc/42/1471.md?p=b-2) facing imminent default, as defined by the [Secretary](/usc/42/242q–4.md?p=2), through the payment of the guaranty and assignment of the [mortgage](/usc/42/1471.md?p=b-2) to the [Secretary](/usc/42/242q–4.md?p=2) and the subsequent [modification](/usc/42/7501.md?p=4) of the terms of the [mortgage](/usc/42/1471.md?p=b-2) according to a loan [modification](/usc/42/7501.md?p=4) approved under this section.
      - (ii) **Acceptance of assignment—** The [Secretary](/usc/42/242q–4.md?p=2) may accept assignment of a [mortgage](/usc/42/1471.md?p=b-2) under a [program](/usc/42/274l–1.md?p=4) under this subsection only if—
        - (I) the [mortgage](/usc/42/1471.md?p=b-2) is in default or facing imminent default;
        - (II) the mortgagee has [modified](/usc/42/7501.md?p=4) the [mortgage](/usc/42/1471.md?p=b-2) or qualified the [mortgage](/usc/42/1471.md?p=b-2) for [modification](/usc/42/7501.md?p=4) sufficient to cure the default and provide for [mortgage](/usc/42/1471.md?p=b-2) payments the mortgagor is reasonably able to pay, at interest rates not exceeding current market interest rates; and
        - (III) the [Secretary](/usc/42/242q–4.md?p=2) arranges for servicing of the assigned [mortgage](/usc/42/1471.md?p=b-2) by a mortgagee (which may include the assigning mortgagee) through procedures that the [Secretary](/usc/42/242q–4.md?p=2) has determined to be in the best interests of the appropriate guaranty [fund](/usc/42/12854.md?p=3).
    - (C) **Payment of guaranty—** Under the [program](/usc/42/274l–1.md?p=4) under this paragraph, the [Secretary](/usc/42/242q–4.md?p=2) may pay the guaranty for a [mortgage](/usc/42/1471.md?p=b-2), in the amount determined in accordance with [paragraph (2)](#h-2), without reduction for any amounts [modified](/usc/42/7501.md?p=4), but only upon the assignment, transfer, and delivery to the [Secretary](/usc/42/242q–4.md?p=2) of all rights, interest, [claims](/usc/42/1320a–7a.md?p=i-2), evidence, and records with respect to the [mortgage](/usc/42/1471.md?p=b-2), as defined by the [Secretary](/usc/42/242q–4.md?p=2).
    - (D) **Disposition—** After [modification](/usc/42/7501.md?p=4) of a [mortgage](/usc/42/1471.md?p=b-2) pursuant to this paragraph, and assignment of the [mortgage](/usc/42/1471.md?p=b-2), the [Secretary](/usc/42/242q–4.md?p=2) may provide guarantees under this subsection for the [mortgage](/usc/42/1471.md?p=b-2). The [Secretary](/usc/42/242q–4.md?p=2) may subsequently—
      - (i) re-assign the [mortgage](/usc/42/1471.md?p=b-2) to the mortgagee under terms and conditions as are agreed to by the mortgagee and the [Secretary](/usc/42/242q–4.md?p=2);
      - (ii) act as a Government National [Mortgage](/usc/42/1471.md?p=b-2) Association issuer, or contract with an entity for such purpose, in order to pool the [mortgage](/usc/42/1471.md?p=b-2) into a Government National [Mortgage](/usc/42/1471.md?p=b-2) Association security; or
      - (iii) re-sell the [mortgage](/usc/42/1471.md?p=b-2) in accordance with any [program](/usc/42/274l–1.md?p=4) that has been established for purchase by the Federal Government of [mortgages](/usc/42/1471.md?p=b-2) insured under this subchapter, and the [Secretary](/usc/42/242q–4.md?p=2) may coordinate [standards](/usc/42/1320d.md?p=7) for interest rate reductions available for loan [modification](/usc/42/7501.md?p=4) with interest rates established for such purchase.
    - (E) **Loan servicing—** In carrying out the [program](/usc/42/274l–1.md?p=4) under this subsection, the [Secretary](/usc/42/242q–4.md?p=2) may require the existing servicer of a [mortgage](/usc/42/1471.md?p=b-2) assigned to the [Secretary](/usc/42/242q–4.md?p=2) under the [program](/usc/42/274l–1.md?p=4) to continue servicing the [mortgage](/usc/42/1471.md?p=b-2) as an agent of the [Secretary](/usc/42/242q–4.md?p=2) during the period that the [Secretary](/usc/42/242q–4.md?p=2) acquires and holds the [mortgage](/usc/42/1471.md?p=b-2) for the purpose of modifying the terms of the [mortgage](/usc/42/1471.md?p=b-2). If the [mortgage](/usc/42/1471.md?p=b-2) is resold pursuant to [subparagraph (D)(iii)](#h-15-D-iii), the [Secretary](/usc/42/242q–4.md?p=2) may provide for the existing servicer to continue to service the [mortgage](/usc/42/1471.md?p=b-2) or may engage another entity to service the [mortgage](/usc/42/1471.md?p=b-2).
  - (16) **Fee—**
    - (A) **In general—** The mortgagee may charge an assuming borrower a reasonable and customary processing fee for an assumption request made under this subsection.
    - (B) **Maximum fee—** The [Secretary](/usc/42/242q–4.md?p=2) shall set a maximum allowable fee described in [subparagraph (A)](#h-16-A), which may be indexed for inflation.
  - (17) **[^3] Definitions—** For purposes of this subsection:
    - (A) The term “displaced homemaker” means an individual who—
      - (i) is an adult;
      - (ii) has not worked full-time full-year in the labor force for a number of years but has, during such years, worked primarily without remuneration to care for the home and [family](/usc/42/290ff–4.md?p=d-2); and
      - (iii) is unemployed or underemployed and is experiencing difficulty in obtaining or upgrading employment.
    - (B) The term “first-time homebuyer” means any individual who (and whose spouse) has had no present ownership in a principal residence during the 3-year period ending on the date of purchase of the property acquired with a guaranteed loan under this subsection except that—
      - (i) any individual who is a [displaced homemaker](#h-17-A) may not be excluded from consideration as a [first-time homebuyer](#h-17-B) under this subparagraph on the basis that the individual, while a homemaker, owned a home with his or her spouse or resided in a home owned by the spouse; and
      - (ii) any individual who is a [single parent](#h-17-C) may not be excluded from consideration as a [first-time homebuyer](#h-17-B) under this subparagraph on the basis that the individual, while married, owned a home with his or her spouse or resided in a home owned by the spouse.
    - (C) The term “single parent” means an individual who—
      - (i) is unmarried or legally separated from a spouse; and
      - (ii)
        - (I) has 1 or more minor [children](/usc/42/256e.md?p=g-2) for whom the individual has custody or joint custody; or
        - (II) is pregnant.
    - (D) The term “State” means the States of the [United States](/usc/42/403.md?p=k), the Commonwealth of Puerto Rico, the District of Columbia, the Commonwealth of the Northern Mariana Islands, Guam, the Virgin Islands, American Samoa, the [Trust](/usc/42/12854.md?p=6) Territories of the Pacific, and any other possession of the [United States](/usc/42/403.md?p=k).
  - (17) **[^3] Guarantees for refinancing loans—**
    - (A) **In general—** Upon the request of the borrower, the [Secretary](/usc/42/242q–4.md?p=2) shall, to the extent provided in appropriation Acts and subject to [subparagraph (F)](#h-17-F), guarantee a loan that is made to refinance an existing loan that is made under this section or guaranteed under this subsection, and that the [Secretary](/usc/42/242q–4.md?p=2) determines complies with the requirements of this paragraph.
    - (B) **Interest rate—** To be eligible for a guarantee under this paragraph, the refinancing loan shall have a rate of interest that is fixed over the term of the loan and does not exceed the interest rate of the loan being refinanced.
    - (C) **Security—** To be eligible for a guarantee under this paragraph, the refinancing loan shall be secured by the same [single](/usc/42/2304.md?p=m)-[family](/usc/42/290ff–4.md?p=d-2) residence as was the loan being refinanced, which shall be owned by the borrower and occupied by the borrower as the principal residence of the borrower.
    - (D) **Amount—** To be eligible for a guarantee under this paragraph, the principal obligation under the refinancing loan shall not exceed an amount equal to the sum of the balance of the loan being refinanced and such closing costs as may be authorized by the [Secretary](/usc/42/242q–4.md?p=2), which shall include a discount not exceeding 200 basis points and an origination fee not exceeding such amount as the [Secretary](/usc/42/242q–4.md?p=2) shall prescribe.
    - (E) **Other requirements—** The provisions of the last sentence of [paragraph (2)](#h-2) and paragraphs [(3)](#h-3), [(6)](#h-6), [(7)(A)](#h-7-A), [(8)](#h-8), [(10)](#h-10), [(13)](#h-13), and [(14)](#h-14) shall apply to loans guaranteed under this paragraph, and no other provisions of [paragraphs (2) through (15)](#h-2..h-15) shall apply to such loans.
    - (F) **Authority to establish limitation—** The [Secretary](/usc/42/242q–4.md?p=2) may establish limitations on the number of loans guaranteed under this paragraph, which shall be based on market conditions and other factors as the [Secretary](/usc/42/242q–4.md?p=2) considers appropriate.
  - (18) **Delegation of approval—** The [Secretary](/usc/42/242q–4.md?p=2) may delegate, in part or in full, the [Secretary](/usc/42/242q–4.md?p=2)’s authority to approve and execute binding Rural [Housing](/usc/42/1490p–2.md?p=r-3) Service loan guarantees pursuant to this subsection to certain preferred lenders, in accordance with [standards](/usc/42/1320d.md?p=7) established by the [Secretary](/usc/42/242q–4.md?p=2).
- (i) **Guaranteed underwriting user fee—**
  - (1) **Authority; maximum amount—** To the extent provided in advance in appropriations Acts, the [Secretary](/usc/42/242q–4.md?p=2) may assess and collect a fee for a lender to access the automated underwriting systems of the Department in connection with such lender’s participation in the [single family](/usc/42/2304.md?p=m) loan [program](/usc/42/274l–1.md?p=4) under this section and only in an amount necessary to cover the costs of information technology enhancements, improvements, maintenance, and development for automated underwriting systems used in connection with the [single family](/usc/42/2304.md?p=m) loan [program](/usc/42/274l–1.md?p=4) under this section, except that such fee shall not exceed $50 per loan.
  - (2) **Crediting; availability—** Any amounts collected from such fees shall be credited to the Rural Development Expense Account as offsetting collections and shall remain available until expended, in the amounts provided in appropriation Acts, solely for expenses described in [paragraph (1)](#i-1).

# §1473. Loans for housing and buildings on potentially adequate farms; conditions and terms


If the [Secretary](/usc/42/242q–4.md?p=2) determines (a) that, because of the inadequacy of the [income](/usc/42/1471.md?p=b-5-A) of an eligible applicant from the farm to be improved and from other sources, said applicant may not reasonably be expected to make annual repayments of principal and interest in an amount sufficient to repay the loan in full within the period of time prescribed by the [Secretary](/usc/42/242q–4.md?p=2) as authorized in this subchapter; (b) that the [income](/usc/42/1471.md?p=b-5-A) of the applicant may be sufficiently increased within a period of not to exceed five years by improvement or enlargement of the farm or an adjustment of the farm [practices](/usc/42/17061.md?p=19) or methods; and (c) that the applicant has adopted and may reasonably be expected to put into effect a plan of farm improvement, enlargement, or adjusted [practices](/usc/42/17061.md?p=19) or production which, in the opinion of the [Secretary](/usc/42/242q–4.md?p=2), will increase the applicant’s [income](/usc/42/1471.md?p=b-5-A) from said farm within a period of not to exceed five years to the extent that the applicant may be expected thereafter to make annual repayments of principal and interest sufficient to repay the balance of the indebtedness less payments in cash and credits for the contributions to be made by the [Secretary](/usc/42/242q–4.md?p=2) as hereinafter provided, the [Secretary](/usc/42/242q–4.md?p=2) may make a loan in an amount necessary to provide adequate [farm dwellings](/usc/42/1471.md?p=d) and [buildings](/usc/42/6881.md?p=i-3) on said farm under the terms and conditions prescribed in [section 1472 of this title](/usc/42/1472.md). In addition, the [Secretary](/usc/42/242q–4.md?p=2) may agree with the borrower to make annual contributions during the said five-year period in the form of credits on the borrower’s indebtedness in an amount not to exceed the annual installment of interest and 50 per centum of the principal payments accruing during any installment year up to and including the fifth installment year, subject to the conditions that the borrower’s [income](/usc/42/1471.md?p=b-5-A) is, in fact, insufficient to enable the borrower to make payments in accordance with the plan or schedule prescribed by the [Secretary](/usc/42/242q–4.md?p=2) and that the borrower pursues his plan of farm reorganization and improvements or enlargement with due diligence.

Except as provided in [title 11](/usc/11.md), this [agreement](/usc/42/1320b–8.md?p=a-3-A) with respect to credits or principal and interest upon the borrower’s indebtedness shall not be assignable nor accrue to the benefit of any third party without the written consent of the [Secretary](/usc/42/242q–4.md?p=2) and the [Secretary](/usc/42/242q–4.md?p=2) shall have the right, at his option, to cancel the [agreement](/usc/42/1320b–8.md?p=a-3-A) upon the sale of the farm or the execution or creation of any lien thereon subsequent to the lien given to the [Secretary](/usc/42/242q–4.md?p=2), or to refuse to [release](/usc/42/9601.md?p=22) the lien given to the [Secretary](/usc/42/242q–4.md?p=2) except upon payment in cash of the entire original principal plus accrued interest thereon less actual cash payments of principal and interest when the [Secretary](/usc/42/242q–4.md?p=2) determines that the [release](/usc/42/9601.md?p=22) of the lien would permit the benefits of this section to accrue to a [person](/usc/42/1320a–7k.md?p=d-4-C-i) not eligible to receive such benefits.


# §1474. Loans and grants for repairs or improvements of rural dwellings

- (a) **Prerequisites; purposes; amounts; terms—** The [Secretary](/usc/42/242q–4.md?p=2) may make a loan, grant, or combined loan and grant to an eligible [very low-income](/usc/42/8013.md?p=k-9) applicant and may make a loan to an eligible low-[income](/usc/42/1471.md?p=b-5-A) applicant in order to improve or modernize a rural dwelling, to make the dwelling safer or more sanitary, or to [remove](/usc/42/9601.md?p=23) [hazards](/usc/42/5165f.md?p=a-3). The [Secretary](/usc/42/242q–4.md?p=2) may make a loan or grant under this subsection to the applicant to cover the cost of any or all [repairs](/usc/42/1471.md?p=a-5), improvements, or additions such as repairing roofs, providing sanitary waste [facilities](/usc/42/11049.md?p=4), providing a convenient and sanitary water supply, repairing or providing structural supports, or making similar [repairs](/usc/42/1471.md?p=a-5), additions, improvements, including all preliminary and installation costs in obtaining central water and sewer service. The maximum amount of a grant, a loan, or a loan and grant shall not exceed such limitations as the [Secretary](/usc/42/242q–4.md?p=2) determines to be appropriate. Any portion of the sums advanced to the borrower treated as a loan shall be secured and be repayable within twenty years in accordance with the principles and conditions set forth in this subchapter, except that a loan for less than $15,000 need be evidenced only by a promissory note. Sums made available by grant may be made subject to the conditions set forth in this subchapter for the protection of the Government with respect to contributions made on loans made by the [Secretary](/usc/42/242q–4.md?p=2).
- (b) **Additional purposes—** In order to encourage adequate [family](/usc/42/290ff–4.md?p=d-2)-size farms the [Secretary](/usc/42/242q–4.md?p=2) may make loans under this section and [section 1473 of this title](/usc/42/1473.md) to any applicant whose farm needs enlargement or development in order to provide [income](/usc/42/1471.md?p=b-5-A) sufficient to support decent, safe, and sanitary [housing](/usc/42/1490p–2.md?p=r-3) and other farm [buildings](/usc/42/6881.md?p=i-3), and may use the [funds](/usc/42/12854.md?p=3) made available under clause (b) of [section 1483 of this title](/usc/42/1483.md) for such purposes.
- (c) **Weatherization program; development, etc.**
  - (1) In addition to other duties specified in this section, the [Secretary](/usc/42/242q–4.md?p=2) shall develop and conduct a weatherization [program](/usc/42/274l–1.md?p=4) for the purpose of making grants to finance the purchase or installation, or both, of [weatherization materials](#c-4) in dwelling [units](/usc/42/1395w–114b.md?p=g-2) occupied by [low-income families](/usc/42/300a–4.md?p=c). Such grants shall be made to [low-income families](/usc/42/300a–4.md?p=c) who own dwelling [units](/usc/42/1395w–114b.md?p=g-2) or, subject to the provisions of [paragraph (2)](#c-2), to [owners](/usc/42/1471.md?p=b-2) of such [units](/usc/42/1395w–114b.md?p=g-2) for the benefit of the low-[income](/usc/42/1471.md?p=b-5-A) tenants residing therein. In making grants under this subsection, the [Secretary](/usc/42/242q–4.md?p=2) shall give priority to the weatherization of dwelling [units](/usc/42/1395w–114b.md?p=g-2) occupied by low-[income](/usc/42/1471.md?p=b-5-A) [elderly](#c-4) or handicapped [persons](/usc/42/1320a–7k.md?p=d-4-C-i). The [Secretary](/usc/42/242q–4.md?p=2) shall, in carrying out this section, consult with the [Director](/usc/42/5061.md?p=1) of the Community Services Administration and the [Secretary](/usc/42/242q–4.md?p=2) of [Energy](/usc/42/6311.md?p=7) for the purpose of coordinating the weatherization [program](/usc/42/274l–1.md?p=4) under this subsection, [section 2809(a)(12) of this title](https://uscode.house.gov/view.xhtml?req=(/us/usc/t42/s2809/a/12)), and part A of the [Energy](/usc/42/6311.md?p=7) Conservation in Existing Buildings Act of 1976 [[42 U.S.C. 6861](/usc/42/6861.md) et seq.].
  - (2) In the case of any grant made under this subsection to an [owner](/usc/42/1471.md?p=b-2) of a rental dwelling [unit](/usc/42/1395w–114b.md?p=g-2) the [Secretary](/usc/42/242q–4.md?p=2) shall provide that (A) the benefits of weatherization assistance in connection with such [unit](/usc/42/1395w–114b.md?p=g-2) will accrue primarily to the [low-income family](/usc/42/300a–4.md?p=c) residing therein, (B) the rents on such dwelling [unit](/usc/42/1395w–114b.md?p=g-2) will not be raised because of any increase in value thereof due solely to weatherization assistance provided under this subsection, and (C) no undue or excessive enhancement will occur to the value of such [unit](/usc/42/1395w–114b.md?p=g-2).
  - (3) In carrying out this subsection, the [Secretary](/usc/42/242q–4.md?p=2) shall (A) implement the weatherization [standards](/usc/42/1320d.md?p=7) described in paragraphs [(2)(A)](/usc/42/413.md) and [(3)](/usc/42/413.md) of section 413(b) of the [Energy](/usc/42/6311.md?p=7) Conservation in Existing Buildings Act of 1976 [[42 U.S.C. 6863(b)](/usc/42/6863.md?p=b)], and (B) provide that, with respect to any dwelling [unit](/usc/42/1395w–114b.md?p=g-2), not more than $800 of any grant made under this section be expended on [weatherization materials](#c-4) and related matters described in [section 415(c)](/usc/42/415.md?p=c) of the [Energy](/usc/42/6311.md?p=7) Conservation in Existing Buildings Act of 1976 [[42 U.S.C. 6865(c)](/usc/42/6865.md?p=c)], except that the [Secretary](/usc/42/242q–4.md?p=2) shall increase such amount to not more than $1,500 to cover labor costs in areas where the [Secretary](/usc/42/242q–4.md?p=2), in consultation with the [Secretary](/usc/42/242q–4.md?p=2) of Labor, determines there is an insufficient number of volunteers and [training](/usc/42/285e–2.md?p=b-2) participants and public service employment workers, assisted pursuant to title I of the Workforce Innovation and Opportunity Act [[29 U.S.C. 3111](/usc/29/3111.md) et seq.] or the Community Service Senior Opportunities Act [[42 U.S.C. 3056](/usc/42/3056.md) et seq.], available to work on weatherization [projects](/usc/42/11360.md?p=20) under the supervision of qualified supervisors.
  - (4) For purposes of this subsection, the terms “elderly,” “handicapped [person](/usc/42/1320a–7k.md?p=d-4-C-i),” “[low income](/usc/42/701.md?p=b-2),” and “weatherization materials” shall have the same meanings given such terms in paragraphs [(3)](#c-3), (5), (7), and (9), respectively, of [section 412](/usc/42/412.md) of the [Energy](/usc/42/6311.md?p=7) Conservation in Existing Buildings Act of 1976 [[42 U.S.C. 6862](/usc/42/6862.md)].