---
kind: "section"
citation: "7 C.F.R. § 1703.304"
title: "7"
number: "1703.304"
heading: "Restrictions on the deferment of loan payments."
url: "https://uscodex.org/cfr/7/1703.304"
---

# §1703.304. Restrictions on the deferment of loan payments.

- (a) The deferment must not impair the security of any loans made RUS or RTB, or guaranteed by RUS, pursuant to the RE Act.
- (b) At no point in time may the amount of the debt service payments deferred exceed 50 percent of the total cost of a community, business, or economic development project for which a deferment is provided.
- (c) A borrower may defer debt service payments only in an amount equal to the investment made by such borrower in a rural development project. The investment must not be made from:
  - (1) Proceeds of loans made or guaranteed pursuant to the RE Act, or grants made pursuant to the RE Act or [section 2331](/cfr/7/2331.md) through section 2335A of the Rural Economic Development Act of 1990 ([7 U.S.C. 950aaa](/usc/7/950aaa.md) et seq.);
  - (2) Funds necessary to make timely payments of principal and interest on loans made, guaranteed or lien accommodated pursuant to the RE Act;
  - (3) Insurance proceeds from mortgaged property;
  - (4) Damage awards and sale proceeds resulting from eminent domain and similar proceedings involving mortgaged property;
  - (5) Sale proceeds from mortgaged property sales requiring specific Administrator approval; and
  - (6) Funds which are restricted by RUS or RTB loan instruments to be held in trust for the Government or to be held for any other specific purpose.
- (d) Any investment made in a rural development project prior to the date of the application for a deferment based on such project cannot be used to satisfy the requirements of this section.

## Notes

### Source

Source: 58 FR 21639, Apr. 23, 1993, unless otherwise noted. Redesignated at 64 FR 14356, Mar. 25, 1999.

### Authority

Authority: 7 U.S.C. 901 et seq.

### Source

Source: 54 FR 6870, Feb. 15, 1989, unless otherwise noted. Redesignated at 55 FR 39394, Sept. 27, 1990.