[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: 7CFR1735.21]

[Page 309]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1735--GENERAL POLICIES, TYPES OF LOANS, LOAN REQUIREMENTS--TELECOMMUNICATIONS PROGRAM--Table of Contents
 
               Subpart B--Loan Purposes and Basic Policies
 
Sec. 1735.21  Refinancing loans.

    (a) Hardship loans and guaranteed loans may include funds to 
refinance outstanding indebtedness of corporations furnishing telephone 
service when such refinancing is necessary and incidental to furnishing 
or improving telephone service in rural areas. Refinancing may not 
constitute more than 40 percent of the loan.
    (b) Loans for refinancing are not made solely to enable borrowers to 
obtain a lower interest rate or a longer amortization period. RUS 
requires borrowers, to the greatest extent possible, to liquidate 
outstanding indebtedness through the use of nonloan funds.
    (c) If deemed necessary by RUS to provide itself with adequate 
security, RUS will consider loans for refinancing outstanding 
indebtedness secured by a lien on property offered as security for the 
loan, if the property covered by the lien is integral to the operation 
of the system.
    (d) RUS will consider loans for refinancing when the borrower would 
otherwise be unable to meet payments on both the outstanding 
indebtedness and the loan as they become due.
    (e) RUS may consider loans for refinancing in other situations.

[54 FR 13351, Apr. 3, 1989. Redesignated at 55 FR 39395, Sept. 27, 1990, 
and amended at 58 FR 66254, Dec. 20, 1993]