---
kind: "section"
citation: "43 U.S.C. § 2423"
title: "43"
title_heading: "Public Lands"
number: "2423"
heading: "Loan guarantees"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/43/2423"
units:
  - "Chapter 42 — Rural Water Supply"
  - "Subchapter II — Twenty-First Century Water Works"
---

# §2423. Loan guarantees

- (a) **Authority—** Subject to the availability of appropriations, the [Secretary](/usc/43/2401.md?p=10) may make available to [lenders](/usc/43/2421.md?p=2) for a [project](/usc/43/2421.md?p=6) meeting the eligibility criteria established in [section 2422 of this title](/usc/43/2422.md) [loan guarantees](/usc/43/2421.md?p=3) to supplement private-sector or [lender](/usc/43/2421.md?p=2) financing for the [project](/usc/43/2421.md?p=6).
- (b) **Terms and limitations—**
  - (1) **In general—** [Loan guarantees](/usc/43/2421.md?p=3) under this section for a [project](/usc/43/2421.md?p=6) shall be on such terms and conditions and contain such covenants, representations, warranties, and requirements as the [Secretary](/usc/43/2401.md?p=10) determines to be appropriate to protect the financial interests of the United States.
  - (2) **Amount—** [Loan guarantees](/usc/43/2421.md?p=3) by the [Secretary](/usc/43/2401.md?p=10) shall not exceed an amount equal to 90 percent of the cost of the [project](/usc/43/2421.md?p=6) that is the subject of the [loan guarantee](/usc/43/2421.md?p=3), as estimated at the time at which the [loan guarantee](/usc/43/2421.md?p=3) is issued.
  - (3) **Interest rate—** An [obligation](/usc/43/2421.md?p=5) shall bear interest at a rate that does not exceed a level that the [Secretary](/usc/43/2401.md?p=10) determines to be appropriate, taking into account the prevailing rate of interest in the private sector for similar loans and risks.
  - (4) **Amortization—** A [loan guarantee](/usc/43/2421.md?p=3) under this section shall provide for complete amortization of the [loan guarantee](/usc/43/2421.md?p=3) within not more than 40 years.
  - (5) **Nonsubordination—** An [obligation](/usc/43/2421.md?p=5) shall be subject to the condition that the [obligation](/usc/43/2421.md?p=5) is not subordinate to other financing.
- (c) **Prepayment and refinancing—** Any prepayment or refinancing terms on a [loan guarantee](/usc/43/2421.md?p=3) shall be negotiated between the [non-Federal borrower](/usc/43/2421.md?p=4) and the [lender](/usc/43/2421.md?p=2) with the consent of the [Secretary](/usc/43/2401.md?p=10).

## Source credit

(Pub. L. 109–451, title II, § 204, Dec. 22, 2006, 120 Stat. 3358.)