7 USC 2008h – Loan and loan servicing limitations
(a) Delinquent borrowers prohibited from obtaining direct operating loans
The Secretary may not make a direct operating loan under subchapter II to a borrower who is delinquent on any loan made or guaranteed under this chapter.
(b) Prohibition of loans for borrowers that have received debt forgiveness
(1) Prohibitions
Except as provided in paragraph (2)—
(A) the Secretary may not make a loan under this chapter to a borrower that has received debt forgiveness on a loan made or guaranteed under this chapter; and
(B) the Secretary may not guarantee a loan under this chapter to a borrower that has received—
(i) debt forgiveness after April 4, 1996, on a loan made or guaranteed under this chapter; or
(ii) received debt forgiveness on more than 3 occasions on or before April 4, 1996.
(2) Exceptions
(A) In general
The Secretary may make a direct or guaranteed farm operating loan for paying annual farm or ranch operating expenses of a borrower who—
(i) was restructured with a write-down under section 2001 of this title;
(ii) is current on payments under a confirmed reorganization plan under chapters 1 11, 12, or 13 of title 11; or
(iii) received debt forgiveness on not more than 1 occasion resulting directly and primarily from a major disaster or emergency designated by the President on or after April 4, 1996, under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).
(B) Emergency loans
(i) In general
The Secretary may make an emergency loan under section 1961 of this title to a borrower that—
(I) on or before April 4, 1996, received not more than 1 debt forgiveness on a loan made or guaranteed under this chapter; and
(II) after April 4, 1996, has not received debt forgiveness on a loan made or guaranteed under this chapter.
(ii) Restructured loans
For purposes of clause (i), a borrower who was restructured with a write-down or restructuring under section 2001 of this title shall not be considered to have received debt forgiveness on a loan made or guaranteed under this chapter.
(c) No more than 1 debt forgiveness for borrower on direct loan
Terms Used In 7 USC 2008h
- borrower: means any farm borrower who has outstanding obligations to the Secretary under any farmer program loan, without regard to whether the loan has been accelerated, but does not include any farm borrower all of whose loans and accounts have been foreclosed on or liquidated, voluntarily or otherwise. See 7 USC 1991
- debt forgiveness: means reducing or terminating a farmer program loan made or guaranteed under this chapter, in a manner that results in a loss to the Secretary, through&mdash. See 7 USC 1991
- direct loan: means a loan made or insured from funds in the account created by section 1929 of this title. See 7 USC 1991
The Secretary may not provide to a borrower debt forgiveness on a direct loan made under this chapter if the borrower has received debt forgiveness on another direct loan made under this chapter.