§1928. Insurance of loans; servicing and purchase of loans; retention of charges out of payments; full faith and credit of United States; incontestability

Loans under this subchapter may be insured by the Secretary whenever funds are advanced or a loan is purchased by a lender other than the United States. In connection with insurance of loans, the Secretary-

(1) is authorized to make agreements with respect to the servicing of loans insured hereunder and to purchase such loans on such terms and conditions as he may prescribe; and

(2) may retain out of payments by the borrower a charge at a rate specified in the insurance agreement applicable to the loan.

Any contract of insurance executed by the Secretary under this subchapter shall be an obligation supported by the full faith and credit of the United States and incontestable except for fraud or misrepresentation of which the holder has actual knowledge.

(Pub. L. 87 128, title III, §308, Aug. 8, 1961, 75 Stat. 308; Pub. L. 87 798, Oct. 11, 1962, 76 Stat. 908; Pub. L. 89 240, §2(a), Oct. 7, 1965, 79 Stat. 932; Pub. L. 90 488, §6, Aug. 15, 1968, 82 Stat. 770; Pub. L. 92 133, Oct. 5, 1971, 85 Stat. 364; Pub. L. 101 624, title XXIII, §2388(a), Nov. 28, 1990, 104 Stat. 4052.)

Amendments

1990-Pub. L. 101 624 redesignated pars. (a) and (b) as pars. (1) and (2), respectively, and in par. (1), substituted "prescribe;" for "prescribe,;".

1971-Pub. L. 92 133 eliminated October 1, 1971, as time limitation for insurance of loans.

1968-Pub. L. 90 488 authorized insurance of loans until Oct. 1, 1971, without the $450,000,000 limitation on aggregate amount in any one year.

1965-Pub. L. 89 240 substituted "$450,000,000" for "$200,000,000", "may retain" for "shall retain", and "specified in the insurance agreement applicable to the loan" for "determined by the Secretary from time to time equivalent to not less than one-half of 1 per centum per annum on the principal unpaid balance of the loan", and struck out "except that no agreement shall provide for purchase by the Secretary at a date sooner than three years from the date of the note" after "he may prescribe".

1962-Pub. L. 87 798 increased aggregate amount of loans that may be insured in any one year from $150,000,000 to $200,000,000.

Loans to Indians

Authority of Secretary of Agriculture to make loans to Indian tribes and tribal corporations to acquire land within reservations, see sections 488 to 492 of Title 25, Indians.

Section Referred to in Other Sections

This section is referred to in sections 1929, 1929a, 1931, 1947, 1968 of this title; title 25 section 488; title 42 section 1485.