U.S Code last checked for updates: Apr 29, 2024
§ 1942.
Purposes of loans
(a)
In general
A direct loan (including a microloan, as defined by the Secretary) may be made under this subchapter only for—
(1)
paying the costs incident to reorganizing a farm or ranch for more profitable operation;
(2)
purchasing livestock, poultry, or farm or ranch equipment;
(3)
purchasing feed, seed, fertilizer, insecticide, or farm or ranch supplies, or to meet other essential farm or ranch operating expenses, including cash rent;
(4)
financing land or water development, use, or conservation;
(5)
paying loan closing costs;
(6)
assisting a farmer or rancher in changing the equipment, facilities, or methods of operation of a farm or ranch to comply with a standard promulgated under section 655 of title 29 or a standard adopted by a State under a plan approved under section 667 of title 29, if the Secretary determines that without assistance under this paragraph the farmer or rancher is likely to suffer substantial economic injury in complying with the standard;
(7)
training a limited-resource borrower receiving a loan under section 1934 of this title in maintaining records of farming and ranching operations;
(8)
training a borrower under section 2006a of this title;
(9)
refinancing the indebtedness of a borrower, if the borrower—
(A)
has refinanced a loan under this subchapter not more than 4 times previously; and
(B)
(i)
is a direct loan borrower under this chapter at the time of the refinancing and has suffered a qualifying loss because of a natural disaster declared by the Secretary under this chapter or a major disaster or emergency designated by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.); or
(ii)
is refinancing a debt obtained from a creditor other than the Secretary; or
(10)
providing other farm, ranch, or home needs, including family subsistence.
(b)
Guaranteed loans
A loan may be guaranteed under this subchapter only for—
(1)
paying the costs incident to reorganizing a farm or ranch for more profitable operation;
(2)
purchasing livestock, poultry, or farm or ranch equipment;
(3)
purchasing feed, seed, fertilizer, insecticide, or farm or ranch supplies, or to meet other essential farm or ranch operating expenses, including cash rent;
(4)
financing land or water development, use, or conservation;
(5)
refinancing indebtedness;
(6)
paying loan closing costs;
(7)
assisting a farmer or rancher in changing the equipment, facilities, or methods of operation of a farm or ranch to comply with a standard promulgated under section 655 of title 29 or a standard adopted by a State under a plan approved under section 667 of title 29, if the Secretary determines that without assistance under this paragraph the farmer or rancher is likely to suffer substantial economic injury due to compliance with the standard;
(8)
training a borrower under section 2006a of this title; or
(9)
providing other farm, ranch, or home needs, including family subsistence.
(c)
Hazard insurance requirement
(1)
In general
(2)
Determination
(d)
Private reserve
(1)
In general
(2)
Limit on size of the reserve
The size of the reserve shall not exceed the least of—
(A)
10 percent of the loan;
(B)
$5,000; or
(C)
the amount needed to provide for the basic family needs of the borrower and the borrower’s immediate family for 3 calendar months.
(e)
Valuation of local or regional crops
(1)
In general
(2)
Price history
(Pub. L. 87–128, title III, § 312, Aug. 8, 1961, 75 Stat. 310; Pub. L. 87–703, title IV, § 401(4), Sept. 27, 1962, 76 Stat. 632; Pub. L. 90–488, § 8, Aug. 15, 1968, 82 Stat. 771; Pub. L. 92–419, title I, §§ 120(b), 121, Aug. 30, 1972, 86 Stat. 665; Pub. L. 95–113, title XIV, § 1448(b), Sept. 29, 1977, 91 Stat. 1012; Pub. L. 95–334, title I, § 115, Aug. 4, 1978, 92 Stat. 425; Pub. L. 96–438, § 1(3), Oct. 13, 1980, 94 Stat. 1871; Pub. L. 99–198, title XIII, §§ 1306, 1307, Dec. 23, 1985, 99 Stat. 1521; Pub. L. 101–624, title XVIII, § 1818(b), Nov. 28, 1990, 104 Stat. 3830; Pub. L. 102–237, title V, § 501(b), Dec. 13, 1991, 105 Stat. 1866; Pub. L. 102–552, title V, § 516(f)(1)(A), (2), Oct. 28, 1992, 106 Stat. 4137, 4138; Pub. L. 104–127, title VI, § 612(a), Apr. 4, 1996, 110 Stat. 1087; Pub. L. 113–79, title V, §§ 5105, 5106(b)(2), Feb. 7, 2014, 128 Stat. 836, 838.)
cite as: 7 USC 1942