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7 U.S. Code § 1981a - Loan moratorium and policy on foreclosures

(a) In general

In addition to any other authority that the Secretary may have to defer principal and interest and forego foreclosure, the Secretary may permit, at the request of the borrower, the deferral of principal and interest on any outstanding loan made, insured, or held by the Secretary under this chapter, or under the provisions of any other law administered by the Farmers Home Administration or by the Rural Development Administration, and may forego foreclosure of any such loan, for such period as the Secretary deems necessary upon a showing by the borrower that due to circumstances beyond the borrower’s control, the borrower is temporarily unable to continue making payments of such principal and interest when due without unduly impairing the standard of living of the borrower. The Secretary may permit interest that accrues during the deferral period on any loan deferred under this section to bear no interest during or after such period: Provided, That if the security instrument securing such loan is foreclosed such interest as is included in the purchase price at such foreclosure shall become part of the principal and draw interest from the date of foreclosure at the rate prescribed by law.

(b) Moratorium
(1) In generalSubject to the other provisions of this subsection, effective beginning on the date of the enactment of this subsection, there shall be in effect a moratorium, with respect to farmer program loans made under subchapter I, II, or III, on all acceleration and foreclosure proceedings instituted by the Department of Agriculture against any farmer or rancher who—
has pending against the Department a claim of program discrimination that is accepted by the Department as valid; or
files a claim of program discrimination that is accepted by the Department as valid.
(2) Waiver of interest and offsets

During the period of the moratorium, the Secretary shall waive the accrual of interest and offsets on all farmer program loans made under subchapter I, II, or III for which loan acceleration or foreclosure proceedings have been suspended under paragraph (1).

(3) Termination of moratoriumThe moratorium shall terminate with respect to a claim of discrimination by a farmer or rancher on the earlier of—
the date the Secretary resolves the claim; or
if the farmer or rancher appeals the decision of the Secretary on the claim to a court of competent jurisdiction, the date that the court renders a final decision on the claim.
(4) Failure to prevail

If a farmer or rancher does not prevail on a claim of discrimination described in paragraph (1), the farmer or rancher shall be liable for any interest and offsets that accrued during the period that loan acceleration or foreclosure proceedings have been suspended under paragraph (1).

Editorial Notes
References in Text

This chapter, referred to in subsec. (a), was in the original “this title”, meaning title III of Pub. L. 87–128, Aug. 8, 1961, 75 Stat. 307, known as the Consolidated Farm and Rural Development Act, which is classified principally to this chapter. For complete classification of title III to the Code, see Short Title note set out under section 1921 of this title and Tables.

The date of the enactment of this subsection, referred to in subsec. (b)(1), is the date of enactment of Pub. L. 110–246, which was approved June 18, 2008.


Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246.

Prior Provisions

Provisions similar to those in this section were contained in the following appropriation acts:

Pub. L. 102–341, title III, Aug. 14, 1992, 106 Stat. 897.

Pub. L. 102–142, title III, Oct. 28, 1991, 105 Stat. 902.

Pub. L. 101–506, title II, Nov. 5, 1990, 104 Stat. 1333.

Pub. L. 101–161, title II, Nov. 21, 1989, 103 Stat. 969.

Pub. L. 100–460, title II, Oct. 1, 1988, 102 Stat. 2246.

Pub. L. 100–202, § 101(k) [title II], Dec. 22, 1987, 101 Stat. 1329–322, 1329–340.

Pub. L. 99–500, § 101(a) [title II], Oct. 18, 1986, 100 Stat. 1783, 1783–16, and Pub. L. 99–591, § 101(a) [title II], Oct. 30, 1986, 100 Stat. 3341, 3341–16.

Pub. L. 99–190, § 101(a) [H.R. 3037, title II], Dec. 19, 1985, 99 Stat. 1185; Pub. L. 100–202, § 106, Dec. 22, 1987, 101 Stat. 1329–433.

Pub. L. 97–370, title II, Dec. 18, 1982, 96 Stat. 1800.


2008—Pub. L. 110–246, § 14002(a), designated existing provisions as subsec. (a) and added subsec. (b).

1990—Pub. L. 101–624 inserted “or by the Rural Development Administration” after “Farmers Home Administration”.

Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment

Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title.

Forbearance and Restructuring for Farm Loans

Pub. L. 100–387, title III, § 313(a), Aug. 11, 1988, 102 Stat. 949, provided that:

“It is the sense of Congress that the Secretary of Agriculture should, with respect to farmers and ranchers who suffer major losses due to drought, hail, excessive moisture, or related condition in 1988—
exercise forbearance in the collection of interest and principal on direct farmer program loans under the Consolidated Farm and Rural Development Act [7 U.S.C. 1921 et seq.] outstanding for such farmers and ranchers;
expedite the use of credit restructuring and other credit relief mechanisms authorized under the Agricultural Credit Act of 1987 [Pub. L. 100–233, Jan. 6, 1988, 101 Stat. 1568, see Tables for classification] and similar provisions of law for such farmers and ranchers; and
encourage commercial lenders participating in guaranteed farmer lending programs under the Consolidated Farm and Rural Development Act to exercise forbearance before declaring loans to such farmers and ranchers under such programs in default.”