[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: 7CFR1735.33]

[Page 314-315]
 
                          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 C--Types of Loans
 
Sec. 1735.33  Variable interest rate loans.

    After June 10, 1991, and prior to November 1, 1993, RUS made certain 
variable rate loans at interest rates less than 5 percent but not less 
than 2 percent. For those borrowers that received variable rate loans, 
this section describes the method by which interest rates are adjusted. 
The interest rate used in determining feasibility is the rate charged to 
the borrower until the end of the Forecast Period for that loan. At the 
end of the Forecast Period, the interest rate for the loan may be 
annually adjusted by the Administrator upward to a rate not greater than 
5 percent, or downward to a rate not less than the rate determined in 
the feasibility study on which the loan was based, based on the 
borrower's ability to pay debt service and maintain a minimum TIER of 
1.0. Downward and upward adjustments will be rounded down to the nearest 
one-half or whole percent. To make this adjustment, projections set 
forth in the loan

[[Page 315]]

feasibility study will be revised annually by RUS (beginning within four 
months after the end of the Forecast Period) to reflect updated revenue 
and expense factors based on the borrower's current operating condition. 
Any such adjustment will be effective on July 1 of the year in which the 
adjustment was determined. If the Administrator determines that the 
borrower is capable of meeting the minimum TIER requirements of 
Sec. 1735.22(f) at a loan interest rate of 5 percent on a loan made as 
described in this section, then the loan interest rate shall be fixed, 
for the remainder of the loan repayment period, at the standard interest 
rate of 5 percent.

[62 FR 46870, Sept. 5, 1997]