TITLE 7 - US CODE - SUBCHAPTER III - EMERGENCY LOANS

7 USC 1961 - Eligibility for loans

(a) Persons eligible 
The Secretary shall make and insure loans under this subchapter only to the extent and in such amounts as provided in advance in appropriation Acts to
(1)  established farmers or ranchers (including equine farmers or ranchers), or persons engaged in aquaculture, who are citizens of the United States and who are owner-operators (in the case of loans for a purpose under subchapter I of this chapter) or operators (in the case of loans for a purpose under subchapter II of this chapter) of not larger than family farms, and
(2)  farm cooperatives, private domestic corporations, partnerships, joint operations, trusts, or limited liability companies
(A)  that are engaged primarily in farming or ranching (including equine farming or ranching) or aquaculture, and

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(B)  in which a majority interest is held by individuals who are citizens of the United States and who are owner-operators (in the case of loans for a purpose under subchapter I of this chapter) or operators (in the case of loans for a purpose under subchapter II of this chapter) of not larger than family farms (or in the case of such cooperatives, corporations, partnerships, joint operations, trusts, or limited liability companies in which a majority interest is held by individuals who are related by blood or marriage, as defined by the Secretary, such individuals must be either owners or operators of not larger than a family farm and at least one such individual must be an operator of not larger than a family farm), where the Secretary finds that the applicants farming, ranching, or aquaculture operations have been substantially affected by a quarantine imposed by the Secretary under the Plant Protection Act [7 U.S.C. 7701 et seq.] or the animal quarantine laws (as defined in section 136a of title 21), a natural disaster in the United States, 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.): Provided, That they have experience and resources necessary to assure a reasonable prospect for successful operation with the assistance of such loan and are not able to obtain sufficient credit elsewhere. In addition to the foregoing requirements of this subsection, in the case of farm cooperatives, private domestic corporations, partnerships, joint operations, trusts, and limited liability companies, the family farm requirement of the preceding sentence shall apply as well to all farms in which the entity has an ownership and operator interest (in the case of loans for a purpose under subchapter I of this chapter) or an operator interest (in the case of loans for a purpose under subchapter II of this chapter). The Secretary shall accept applications from, and make or insure loans pursuant to the requirements of this subchapter to, applicants, otherwise eligible under this subchapter, that conduct farming, ranching, or aquaculture operations in any county contiguous to a county where the Secretary has found that farming, ranching, or aquaculture operations have been substantially affected by a quarantine imposed by the Secretary under the Plant Protection Act [7 U.S.C. 7701 et seq.] or the animal quarantine laws (as defined in section 136a of title 21), a natural disaster in the United States, 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.). The Secretary shall accept applications for assistance under this subchapter from persons affected by such a quarantine or natural disaster at any time during the eight-month period beginning
(A)  on the date on which the Secretary determines that farming, ranching, or aquaculture operations have been substantially affected by such quarantine or natural disaster or
(B)  on the date the President makes the major disaster or emergency designation with respect to such natural disaster, as the case may be.
(b) Hazard insurance requirement 

(1) In general 
After the Secretary makes the determination required by paragraph (2), the Secretary may not make a loan to a farmer or rancher under this subchapter to cover a property loss unless the farmer or rancher had hazard insurance that insured the property at the time of the loss.
(2) Determination 
Not later than 180 days after April 4, 1996, the Secretary shall determine the appropriate level of insurance to be required under paragraph (1).
(3) Loans to poultry farmers 

(A) Inability to obtain insurance 

(i) In general Notwithstanding any other provision of this subchapter, the Secretary may make a loan to a poultry farmer under this subchapter to cover the loss of a chicken house for which the farmer did not have hazard insurance at the time of the loss, if the farmer
(I) applied for, but was unable, to obtain hazard insurance for the chicken house;

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(II) uses the loan to rebuild the chicken house in accordance with industry standards in effect on the date the farmer submits an application for the loan (referred to in this paragraph as current industry standards);
(III) obtains, for the term of the loan, hazard insurance for the full market value of the chicken house; and
(IV) meets the other requirements for the loan under this subchapter.
(ii) Amount Subject to the limitation contained in section 1964 (a)(2) of this title, the amount of a loan made to a poultry farmer under clause (i) shall be an amount that will allow the farmer to rebuild the chicken house in accordance with current industry standards.
(B) Loans to comply with current industry standards 

(i) In general Notwithstanding any other provision of this subchapter, the Secretary may make a loan to a poultry farmer under this subchapter to cover the loss of a chicken house for which the farmer had hazard insurance at the time of the loss, if
(I) the amount of the hazard insurance is less than the cost of rebuilding the chicken house in accordance with current industry standards;
(II) the farmer uses the loan to rebuild the chicken house in accordance with current industry standards;
(III) the farmer obtains, for the term of the loan, hazard insurance for the full market value of the chicken house; and
(IV) the farmer meets the other requirements for the loan under this subchapter.
(ii) Amount Subject to the limitation contained in section 1964 (a)(2) of this title, the amount of a loan made to a poultry farmer under clause (i) shall be the difference between
(I) the amount of the hazard insurance obtained by the farmer; and
(II) the cost of rebuilding the chicken house in accordance with current industry standards.
(c) Family farm system 
The Secretary shall conduct the emergency loan program under this subchapter in a manner that will foster and encourage the family farm system of agriculture, consistent with the reaffirmation of policy and declaration of the intent of Congress contained in section 2266 (a) of this title.
(d) Definitions 
For the purposes of this subchapter
(1) aquaculture means the husbandry of aquatic organisms under a controlled or selected environment; and
(2) able to obtain sufficient credit elsewhere means able to obtain sufficient credit elsewhere to finance the applicants actual needs at reasonable rates and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near which the applicant resides for loans for similar purposes and periods of time.

7 USC 1962 - Loan determination factors; written credit declinations

(a) For the purpose of determining whether to make or insure any loan under this subchapter, the Secretary shall take into consideration the net worth of the applicant involved, including all the assets and liabilities of the applicant.
(b) For the purpose of determining whether an applicant under this subchapter is not able to obtain sufficient credit elsewhere, the Secretary shall require at least one written indication of declination of credit, from a legally organized lending institution within reasonable proximity to the applicant, that specifies the reasons for the declination: Provided, That for loans in excess of $300,000, the Secretary shall require at least two such written declinations: Provided further, That for loans of $100,000 or less, the Secretary may waive the requirement of this subsection if the Secretary determines that it would impose an undue burden on the applicant.

7 USC 1963 - Purpose and extent of loans

Loans may be made or insured under this subchapter for any purpose authorized for loans under subchapter I or II of this chapter and for crop or livestock changes that are necessitated by a quarantine, natural disaster, major disaster, or emergency and that are deemed desirable by the applicant, subject to the limitations on the amounts of loans provided in section 1964 (a) of this title.

7 USC 1964 - Terms of loans

(a) Maximum amount of loan 
The Secretary may not make a loan under this subchapter to a borrower who has suffered a loss in an amount that
(1) exceeds the actual loss caused by a disaster; or
(2) would cause the total indebtedness of the borrower under this subchapter to exceed $500,000.
(b) Interest rates 
Loans under this subchapter shall be at rates of interest as follows:
(1) For loans or portions of loans up to the amount of the applicants actual loss caused by the disaster, as limited under subsection (a)(1) of this section, the interest shall be at rates prescribed by the Secretary, but not in excess of 8 percent per annum; and
(2) For loans or portions of loans in excess of the amount of the applicants actual loss caused by the disaster, as limited under subsection (a)(1) of this section,
(A)  the interest for insured loans shall be at rates prevailing in the private market for similar loans, as determined by the Secretary, and
(B)  the interest for guaranteed loans shall be at rates agreed on by the borrower and lender, but not in excess of such rates as may be determined by the Secretary.
(c) Interest subsidies 
For guaranteed loans under this subchapter, the Secretary may pay interest subsidies to the lenders for those portions of the loans up to the amount of the actual loss caused by the disaster, as limited under subsection (a)(1) of this section. Any such subsidy shall not exceed the difference between the interest rate being charged for loans up to the amount of the actual loss, as established under subsection (b)(1) of this section, and the maximum interest rate for guaranteed loans, as established under subsection (b)(2) of this section.
(d) Repayment 

(1) In general 
All loans under this subchapter shall be repayable at such times as the Secretary may determine, taking into account the purposes of the loan and the nature and effect of the disaster, but not later than as provided for loans for similar purposes under subchapters I and II of this chapter, and upon the full personal liability of the borrower and upon the best security available, as the Secretary may prescribe: Provided, That the security is adequate to assure repayment of the loans, except that if such security is not available because of the disaster, the Secretary shall
(1)  accept as security such collateral as is available, a portion or all of which may have depreciated in value due to the disaster and which in the opinion of the Secretary, together with the Secretarys confidence in the repayment ability of the applicant, is adequate security for the loan, and
(2)  make such loan repayable at such times as the Secretary may determine, not later than as provided under subchapters I and II of this chapter, as justified by the needs of the applicant: Provided further, That for any disaster occurring after January 1, 1975, the Secretary, if the loan is for a purpose described in subchapter II of the chapter, may make the loan repayable at the end of a period of more than seven years, but not more than twenty years, if the Secretary determines that the need of the loan applicant justifies such a longer repayment period: Provided further, That for any direct or insured loan (other than a guaranteed loan) approved under section 1961 (b) of this title, three years after the loan is made or insured, and every two years thereafter for the term of the loan, the Secretary shall review the loan; and if, based on such review, the Secretary determines that the borrower is able to obtain a loan from non-Federal sources at reasonable rates and terms for loans for similar purposes and periods of time, the borrower shall on request by the Secretary, apply for and accept such non-Federal loan in sufficient amount to repay the Secretary. If farm assets (including land, livestock, and equipment) are used as collateral to secure a loan made under this subchapter, the Secretary shall establish the value of the assets as of the day before the occurrence of the natural disaster, major disaster, or emergency that is the basis for a request for assistance under this subchapter or the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).
(2) No basis for denial of loan 

(A) In general 
Subject to subparagraph (B), the Secretary shall not deny a loan under this subchapter to a borrower by reason of the fact that the borrower lacks a particular amount of collateral for the loan if the Secretary is reasonably certain that the borrower will be able to repay the loan.
(B) Refusal to pledge available collateral 
The Secretary may deny or cancel a loan under this subchapter if a borrower refuses to pledge available collateral on request by the Secretary.
(e) Grant eligibility 
Any political subdivision of a State with a population of less than ten thousand inhabitants that, if such subdivision had a population of ten thousand or more inhabitants, would be eligible for a grant under the first title of the Community Emergency Drought Relief Act of 1977 shall be eligible for a grant under this chapter during any period in which the Community Emergency Drought Relief Act of 1977 is or has been in effect.

7 USC 1965 - Repealed. Pub. L. 95334, title I, 120, Aug. 4, 1978, 92 Stat. 427

Section, Pub. L. 87–128, title III, § 325, Aug. 8, 1961, 75 Stat. 311; Pub. L. 94–68, § 6, Aug. 5, 1975, 89 Stat. 382, authorized delegation of authority to State Directors of Farmers Home Administration for making emergency loans.

7 USC 1966 - Emergency Credit Revolving Fund utilization

The Secretary is authorized to utilize the revolving fund created by section 1148a1 of title 12 (hereinafter in this subchapter referred to as the Emergency Credit Revolving Fund) for carrying out the purposes of this subchapter.
[1] See References in Text note below.

7 USC 1967 - Addition to Emergency Credit Revolving Fund of sums from liquidation of loans; authorization of appropriations

(a) All sums received by the Secretary from the liquidation of loans made under the provisions of this subchapter or under the Act of April 6, 1949, as amended, or the Act of August 31, 1954, and from the liquidation of any other assets acquired with money from the Emergency Credit Revolving Fund shall be added to and become a part of such fund.
(b) There are authorized to be appropriated to the Emergency Credit Revolving Fund such additional sums as the Congress shall from time to time determine to be necessary.

7 USC 1968 - Repealed. Pub. L. 104127, title VI, 626, Apr. 4, 1996, 110 Stat. 1092

Section, Pub. L. 87–128, title III, § 328, as added Pub. L. 92–173, Nov. 24, 1971, 85 Stat. 491; amended Pub. L. 93–24, § 5, Apr. 20, 1973, 87 Stat. 25; Pub. L. 95–334, title I, § 109(b), Aug. 4, 1978, 92 Stat. 423, related to insurance of loans.

7 USC 1969 - Repealed. Pub. L. 9324, 1, Apr. 20, 1973, 87 Stat. 24

Section, Pub. L. 87–128, title III, § 328, as added Pub. L. 92–385, § 5, Aug. 16, 1972, 86 Stat. 557, provided for emergency loans for major and natural disasters occurring between June 30, 1971, and July 1, 1973, providing in: subsec. (a) for cancellation of existing loans and the considerations in making grants, loans, and refinancing of loans; subsec. (b) for loans for loss or damage to agricultural crops; subsec. (c) for amount of loans and interest rates; subsec. (d) for availability of benefits irrespective of age; subsec. (e) for availability of benefits irrespective of approval date; and subsec. (f) for report to Congress.

7 USC 1970 - Eligibility for assistance based on production loss

The Secretary shall make financial assistance under this subchapter available to any applicant seeking assistance based on production losses if the applicant shows that a single enterprise which constitutes a basic part of the applicants farming, ranching, or aquaculture operation has sustained at least a 30 per centum loss of normal per acre or per animal production, or such lesser per centum of loss as the Secretary may determine, as a result of the disaster based upon the average monthly price in effect for the previous year and the applicant otherwise meets the conditions of eligibility prescribed under this subchapter. Such loans shall be made available based upon 80 per centum, or such greater per centum as the Secretary may determine, of the total calculated actual production loss sustained by the applicant.

7 USC 1971 - Repealed. Pub. L. 99198, title XIII, 1308(d), Dec. 23, 1985, 99 Stat. 1523

Section, Pub. L. 87–128, title III, § 330, as added Pub. L. 94–68, § 8, Aug. 5, 1975, 89 Stat. 382; amended Pub. L. 96–438, § 3(b)(2), Oct. 13, 1980, 94 Stat. 1875, authorized additional emergency loans.