---
kind: "section"
citation: "25 U.S.C. § 5142"
title: "25"
title_heading: "Indians"
number: "5142"
heading: "Reduction of unpaid principal"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/25/5142"
units:
  - "Chapter 45 — Protection of Indians and Conservation of Resources"
---

# §5142. Reduction of unpaid principal

- (a) **In general—** The [Secretary](/usc/25/5130.md?p=1) of Agriculture may, on the application of the borrower of a loan or loans made under sections [5136](/usc/25/5136.md) to [5143](/usc/25/5143.md) of this title, reduce the unpaid principal balance of such loan or loans to the current fair market value of the land purchased with the proceeds of the loan or loans if—
  - (1) the fair market value of the land has declined by at least 25 percent since such land was purchased by the borrower;
  - (2) the land has been held by the borrower for a period of at least 5 years; and
  - (3) the [Secretary](/usc/25/5130.md?p=1) of the Interior finds that the borrower has insufficient income to both repay the loan or loans and provide normal tribal governmental services.
- (b) **Fair market value—**
  - (1) **Appraisal—** Current fair market value under [subsection (a)](#a) of this section shall be determined through an appraisal by an independent qualified fee appraiser, selected by mutual agreement between the borrower and the [Secretary](/usc/25/5130.md?p=1) of Agriculture.
  - (2) **Costs—** The cost of appraisals undertaken under [paragraph (1)](#b-1) shall be paid by the borrower.
- (c) **Appeals—** Decisions of the [Secretary](/usc/25/5130.md?p=1) of Agriculture under this section shall be appealable in accordance with the provisions of section 333B[^1] of the Consolidated Farm and Rural Development Act ([7 U.S.C. 1983b](/usc/7/1983b.md)).
- (d) **Future applications—** A borrower that had a loan or loans reduced under this section shall not submit an application for another reduction on such loan or loans for a period of 5 years after the initial reduction.

## Footnotes

[^1]: See References in Text note below.

## Source credit

(Pub. L. 91–229, § 6, as added Pub. L. 101–82, title III, § 303, Aug. 14, 1989, 103 Stat. 583.)

## Notes

### Editorial Notes

### References in Text

Section 333B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983b), referred to in subsec. (c), probably means section 333B of Pub. L. 87–128, as added by Pub. L. 99–198, title XIII, § 1313(a), Dec. 23, 1985, 99 Stat. 1525, and amended, which related to appeals from adverse decisions under the Act, prior to repeal by Pub. L. 103–354, title II, § 281(c), Oct. 13, 1994, 108 Stat. 3233, and enactment of a new section 333B of Pub. L. 87–128 by Pub. L. 110–234, title V, § 5301, May 22, 2008, 122 Stat. 1147, and Pub. L. 110–246, title V, § 5301, June 18, 2008, 122 Stat. 1908, which established a beginning farmers’ pilot program.

### Codification

Another section 6 of Pub. L. 91–229 was added by Pub. L. 101–624, title XVIII, § 1854(b), Nov. 28, 1990, 104 Stat. 3837, and is classified to section 5143 of this title.

Section was formerly classified to section 493 of this title prior to editorial reclassification and renumbering as this section.