---
kind: "section"
citation: "42 U.S.C. § 300q"
title: "42"
title_heading: "The Public Health and Welfare"
number: "300q"
heading: "Loan and loan guarantee authority"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/300q"
units:
  - "Chapter 6A — Public Health Service"
  - "Subchapter XIV — Health Resources Development"
  - "Part A — Loans and Loan Guarantees"
---

# §300q. Loan and loan guarantee authority

- (a) **Covered projects: duration; payment of principal and interest on loans for covered projects: duration; payments for reduction of interest rate—**
  - (1) The [Secretary](/usc/42/201.md?p=c), during the period ending September 30, 1982, may, in accordance with this part, make loans from the fund established under [section 300q–2(d) of this title](/usc/42/300q–2.md?p=d) to any public or [nonprofit](/usc/42/300s–3.md?p=3) private entity for [projects](/usc/42/13641.md?p=2) for—
    - (A) the discontinuance of unneeded [hospital](/usc/42/300s–3.md?p=1) [services](/usc/42/201.md?p=a) or facilities,[^1]
    - (B) the conversion of unneeded [hospital](/usc/42/300s–3.md?p=1) [services](/usc/42/201.md?p=a) and facilities to needed health [services](/usc/42/201.md?p=a) and [medical facilities](/usc/42/300s–3.md?p=11), including [outpatient medical facilities](/usc/42/300s–3.md?p=4) and facilities for long-term care;
    - (C) the renovation and [modernization](/usc/42/300s–3.md?p=9) of [medical facilities](/usc/42/300s–3.md?p=11), particularly [projects](/usc/42/13641.md?p=2) for the prevention or elimination of safety hazards, [projects](/usc/42/13641.md?p=2) to avoid noncompliance with licensure or accreditation standards, or [projects](/usc/42/13641.md?p=2) to replace obsolete facilities;
    - (D) the [construction](/usc/42/300s–3.md?p=7) of new [outpatient medical facilities](/usc/42/300s–3.md?p=4); and
    - (E) the [construction](/usc/42/300s–3.md?p=7) of new inpatient [medical facilities](/usc/42/300s–3.md?p=11) in areas which have experienced (as determined by the [Secretary](/usc/42/201.md?p=c)) recent rapid population growth.
  - (2)
    - (A) The [Secretary](/usc/42/201.md?p=c), during the period ending September 30, 1982, may, in accordance with this part, guarantee to—
      - (i) non-Federal lenders for their loans to public and [nonprofit](/usc/42/300s–3.md?p=3) private entities for [medical facilities](/usc/42/300s–3.md?p=11) [projects](/usc/42/13641.md?p=2) described in [paragraph (1)](#a-1), and
      - (ii) the Federal Financing Bank for its loans to public and [nonprofit](/usc/42/300s–3.md?p=3) private entities for such [projects](/usc/42/13641.md?p=2),

      payment of principal and interest on such loans.

    - (B) In the case of a guarantee of any loan to a public or [nonprofit](/usc/42/300s–3.md?p=3) private entity under [subparagraph (A)(i)](#a-2-A-i) which is located in an [urban or rural poverty area](/usc/42/300s–3.md?p=13), the [Secretary](/usc/42/201.md?p=c) may pay, to the holder of such loan and for and on behalf of the [project](/usc/42/13641.md?p=2) for which the loan was made, amounts sufficient to reduce by not more than one half the net effective interest rate otherwise payable on such loan if the [Secretary](/usc/42/201.md?p=c) finds that without such assistance the [project](/usc/42/13641.md?p=2) could not be undertaken.
- (b) **Amount of loans for medical facilities projects and such projects in urban or rural poverty areas—** The principal amount of a loan directly made or guaranteed under [subsection (a)](#a) for a [medical facilities](/usc/42/300s–3.md?p=11) [project](/usc/42/13641.md?p=2), when added to any other assistance provided such [project](/usc/42/13641.md?p=2) under part B, may not exceed 90 per centum of the cost of such [project](/usc/42/13641.md?p=2) unless the [project](/usc/42/13641.md?p=2) is located in an area determined by the [Secretary](/usc/42/201.md?p=c) to be an [urban or rural poverty area](/usc/42/300s–3.md?p=13), in which case the principal amount, when added to other assistance under part B, may cover up to 100 per centum of such costs.
- (c) **Limitation on cumulative total of principal of outstanding loans—** The cumulative total of the principal of the loans outstanding at any time with respect to which guarantees have been issued, or which have been directly made, may not exceed such limitations as may be specified in appropriation Acts.
- (d) **Administrative assistance of Department of Housing and Urban Development—** The [Secretary](/usc/42/201.md?p=c), with the consent of the [Secretary](/usc/42/201.md?p=c) of Housing and Urban Development, shall obtain from the Department of Housing and Urban Development such assistance with respect to the administration of this part as will promote efficiency and economy thereof.

## Footnotes

[^1]: So in original. The comma probably should be a semicolon.

## Source credit

(July 1, 1944, ch. 373, title XVI, § 1601, formerly § 1620, as added Pub. L. 93–641, § 4, Jan. 4, 1975, 88 Stat. 2264; amended Pub. L. 94–273, § 2(21), Apr. 21, 1976, 90 Stat. 376; Pub. L. 95–83, title I, § 106(x)(1), Aug. 1, 1977, 91 Stat. 385; renumbered § 1601 and amended Pub. L. 96–79, title II, §§ 201(b)(1), 203(a)(1), (2), Oct. 4, 1979, 93 Stat. 630, 635.)

## Notes

### Editorial Notes

### Prior Provisions

A prior section 1601 of act July 1, 1944, ch. 373, title XVI, as added Jan. 4, 1975, Pub. L. 93–641, § 4, 88 Stat. 2258, was classified to section 300o of this title, prior to repeal by Pub. L. 96–79, § 202(a).

### Amendments

1979—Subsec. (a). Pub. L. 96–79, §§ 201(b)(1), 203(a)(2), added par. (1); substituted reference to section 1602(d) for 1622(d), set out in text as “section 300q–2(d) of this title”; incorporated in par. (2) former subsec. (b) provisions made applicable for period ending Sept. 30, 1982, previously covering period beginning July 1, 1974, and ending Sept. 30, 1978, extended provisions to public entities, struck out existing condition that applications for assistance under subchapter be approved under former section 300o–3 of this title, substituted in subpar. (2)(B) provision for payment of amounts sufficient to reduce by not more than one half net effective interest otherwise payable on the loan for prior provision for amounts sufficient to reduce by 3 per centum per annum net effective interest rate on the loan, and struck out provision granting contractual right of holder of a guaranteed loan to receive from the United States such interest payments.

Subsec. (b). Pub. L. 96–79, § 201(b)(1), added subsec. (b) and incorporated existing provisions of subsec. (b) relating to loan guarantee authority for payment of principal and interest on loans for approved projects, their duration, and payments for reduction of interest rate in subsec. (a)(2) of this section.

1977—Subsecs. (a), (b)(1). Pub. L. 95–83 substituted “September 30, 1978” for “September 30, 1977”.

1976—Subsecs. (a), (b)(1). Pub. L. 94–273 substituted “September” for “June”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 1979 Amendment

Pub. L. 96–79, title II, § 204, Oct. 4, 1979, 93 Stat. 636, provided that: “The amendments made by this title [enacting sections 300s, 300s–1, and 300s–6, amending this section and sections 201, 300q–2, 300r, 300s–1a, 300s–3, and 300s–5, and repealing sections 300o to 300o–3, 300p to 300p–3, 300q–1, and 300s of this title] shall take effect October 1, 1979, except that the amendments made by section 201(b) [amending this section and section 300q–2 of this title] respecting the payment of an interest subsidy for a loan or loan guarantee made under part A of title XVI of the Public Health Service Act [42 U.S.C. 300q et seq.] shall apply only with respect to loans and loan guarantees made after October 1, 1979, and with respect to loans and loan guarantees made under such part before such date the Secretary shall continue to pay the interest subsidy authorized for such loans and loan guarantees before such date.”