7 CFR § 1714.9 - Prepayment of insured loans.

This section sets out provisions for prepayment of insured electric loans at face value. Provisions for discounted prepayment of RUS loans are set out in 7 CFR part 1786.

(a) Municipal rate loans. Loan documents for municipal rate loans shall provide for the following:

(1) Prepayment on a rollover maturity date. All, or a portion of, the outstanding balance on any advance from a municipal rate loan may be prepaid on any rollover maturity date pursuant to § 1714.6(a)(4).

(2) Prepayment on a date other than a rollover maturity date. A borrower may elect at the time of loan approval to include a prepayment option (call provision) that will allow the borrower to prepay all, or a portion of, the outstanding balance on any advance on a date other than a rollover maturity date. Interest rates on advances from loans with a prepayment provision will be increased as set forth in § 1714.4(a).

(b) Hardship rate loans. Loan documents for hardship loans shall provide that the loan may be prepaid at face value at any time without penalty.