[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1714.4]

[Page 130-131]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1714--PRE-LOAN POLICIES AND PROCEDURES FOR INSURED ELECTRIC LOANS--Table of Contents
 
                           Subpart A--General
 
Sec. 1714.4  Interest rates.

    (a) Municipal rate loans. Each advance of funds on a municipal rate 
loan shall

[[Page 131]]

bear interest at a single rate for each interest rate term. All interest 
rates applicable to municipal rate loans will be increased by one eighth 
of one percent (0.125 percent), if the borrower elects to include in the 
loan agreement a prepayment option (call provision), allowing the 
borrower to prepay all or a portion of an advance on a date other than a 
rollover maturity date. However, no interest rate for any advances of a 
loan to a borrower who qualifies for the interest rate cap may exceed 7 
percent.
    (b) Hardship rate loans. All advances of funds on hardship rate 
loans shall bear interest at a rate of 5 percent.
    (c) Application procedure. The borrower's board resolution submitted 
with the loan application must indicate whether the application is for a 
municipal rate loan, with or without the interest rate cap, or a 
hardship rate loan. If the application is for a municipal rate loan, the 
board resolution must also indicate whether the borrower intends to 
elect the prepayment option.

[58 FR 66260, Dec. 20, 1993, as amended at 67 FR 16969, Apr. 9, 2002]