§ 936. — Guaranteed loans; accommodation and subordination of liens; interest rates; assignability of guaranteed loans and related guarantees.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC936]
TITLE 7--AGRICULTURE
CHAPTER 31--RURAL ELECTRIFICATION AND TELEPHONE SERVICE
SUBCHAPTER III--RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS
Sec. 936. Guaranteed loans; accommodations and subordination of
liens; interest rates; assignability of guaranteed loans and
related guarantees
The Secretary may provide financial assistance to borrowers for
purposes provided in this chapter by guaranteeing loans, in the full
amount thereof, made by the Rural Telephone Bank, National Rural
Utilities Cooperative Finance Corporation, and any other legally
organized lending agency, or by accommodating or subordinating liens or
mortgages in the fund held by the Secretary as owner or as trustee or
custodian for purchases of notes from the fund, or by any combination of
such guarantee, accommodation, or subordination. The Secretary shall not
provide such assistance to any borrower of a telephone loan under this
chapter unless the borrower specifically applies for such assistance. No
fees or charges shall be assessed for any such guarantee, accommodation,
or subordination. With respect to guarantees issued by the Secretary
under this section, on the request of the borrower of any such loan so
guaranteed, the loan shall be made by the Federal Financing Bank and at
a rate of interest that is not more than the rate of interest applicable
to other similar loans then being made or purchased by the Bank.
Guaranteed loans shall bear interest at the rate agreed upon by the
borrower and the lender. Guaranteed loans, and accommodation and
subordination of liens or mortgages, may be made concurrently with an
insured loan. The amount of guaranteed loans shall be subject only to
such limitations as to amounts as may be authorized from time to time by
the Congress of the United States: Provided, That any amounts guaranteed
hereunder shall not be included in the totals of the budget of the
United States Government and shall be exempt from any general limitation
imposed by statute on expenditures and net lending (budget outlays) of
the United States. As used in this subchapter a guaranteed loan is one
which is initially made, held, and serviced by a legally organized
lending agency and which is guaranteed by the Secretary hereunder. A
guaranteed loan, including the related guarantee, may be assigned to the
extent provided in the contract of guarantee executed by the Secretary
under this subchapter; the assignability of such loan and guarantee
shall be governed exclusively by said contract of guarantee.
(May 20, 1936, ch. 432, title III, Sec. 306, as added Pub. L. 93-32,
Sec. 2, May 11, 1973, 87 Stat. 69; amended Pub. L. 94-124, Sec. 1, Nov.
4, 1975, 89 Stat. 677; Pub. L. 97-35, title I, Sec. 165(b), Aug. 13,
1981, 95 Stat. 379; Pub. L. 101-624, title XXIII, Sec. 2362, Nov. 28,
1990, 104 Stat. 4042; Pub. L. 103-354, title II, Sec. 235(a)(13), Oct.
13, 1994, 108 Stat. 3221.)
Amendments
1994--Pub. L. 103-354 substituted ``Secretary'' for
``Administrator'' wherever appearing.
1990--Pub. L. 101-624 inserted provisions prohibiting Administrator
from providing assistance to telephone borrower unless borrower
specifically applies therefor.
1981--Pub. L. 97-35 inserted provisions relating to loans made by
Federal Financing Bank with respect to guarantees issued under this
section, and substituted ``an insured loan'' for ``a loan insured at the
standard rate''.
1975--Pub. L. 94-124 authorized assignment of guaranteed loans and
their related guarantees and inserted ``initially'' before ``made, held,
and serviced'' in provision defining guaranteed loans as that term is
used in this subchapter.
Effective Date
Section effective May 11, 1973, see section 12 of Pub. L. 93-32, set
out as a note under section 930 of this title.
Prepayment of Loans
Pub. L. 99-349, title I, July 2, 1986, 100 Stat. 713, related to the
prepayment of loans made by the Federal Financing Bank, and guaranteed
by the Administrator of the Rural Electrification Administration, prior
to repeal by Pub. L. 99-509, title I, Sec. 1011(b), Oct. 21, 1986, 100
Stat. 1876.
Section Referred to in Other Sections
This section is referred to in sections 928, 935, 936a, 936c, 939 of
this title.
