
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 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.
