---
kind: "section"
citation: "46 U.S.C. § 53709"
title: "46"
title_heading: "Shipping"
number: "53709"
heading: "Amount of obligations"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/46/53709"
units:
  - "Subtitle V — Merchant Marine"
  - "Part C — Financial Assistance Programs"
  - "Chapter 537 — Loans and Guarantees"
  - "Subchapter I — General"
---

# §53709. Amount of obligations

- (a) **In General.—** The principal of an [obligation](/usc/46/53701.md?p=9) may not be guaranteed in an amount greater than the amount determined by multiplying the percentage applicable under [subsection (b)](#b) by—
  - (1) the amount paid by or for the account of the [obligor](/usc/46/53701.md?p=11) (as determined by the [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2), which determination shall be conclusive) for the [construction](/usc/46/53701.md?p=3), [reconstruction](/usc/46/53701.md?p=3), or [reconditioning](/usc/46/53701.md?p=3) of the [vessel](/usc/46/53501.md?p=9) used as security for the guarantee; or
  - (2) if the [obligor](/usc/46/53701.md?p=11) creates an escrow fund under [section 53715 of this title](/usc/46/53715.md), the [actual cost](/usc/46/53701.md?p=1) of the [vessel](/usc/46/53501.md?p=9).
- (b) **Limitations on Amount Borrowed.—**
  - (1) **In general.—** Except as otherwise provided, the principal amount of an [obligation](/usc/46/53701.md?p=9) guaranteed under this chapter may not exceed 75 percent of the [actual cost](/usc/46/53701.md?p=1) or [depreciated actual cost](/usc/46/53701.md?p=4), as determined by the [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2), of the [vessel](/usc/46/53501.md?p=9) used as security for the guarantee.
  - (2) **Certain approved vessels.—** The principal amount may not exceed 87.5 percent of the [actual cost](/usc/46/53701.md?p=1) or [depreciated actual cost](/usc/46/53701.md?p=4) if—
    - (A) the size and speed of the [vessel](/usc/46/53501.md?p=9) are approved by the [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2);
    - (B) the [vessel](/usc/46/53501.md?p=9) is or would have been eligible for [mortgage](/usc/46/53701.md?p=8) aid for [construction](/usc/46/53701.md?p=3) under section 509 of the Merchant Marine Act, 1936, or would have been eligible except that the [vessel](/usc/46/53501.md?p=9) was built with a [construction](/usc/46/53701.md?p=3)-differential subsidy and the subsidy has been repaid; and
    - (C) the [vessel](/usc/46/53501.md?p=9) is of a type described in that section for which the minimum down payment required by that section is 12.5 percent of the cost of the [vessel](/usc/46/53501.md?p=9).
  - (3) **Fishing vessels and fishery facilities.—** For a [fishing vessel](/usc/46/53701.md?p=6) or [fishery facility](/usc/46/53701.md?p=5-A), the principal amount may not exceed 80 percent of the [actual cost](/usc/46/53701.md?p=1) or [depreciated actual cost](/usc/46/53701.md?p=4). However, debt for the [vessel](/usc/46/53501.md?p=9) or facility may not be placed through the Federal Financing Bank.
  - (4) **OTEC.—** For an [ocean thermal energy conversion facility or plantship](/usc/46/53701.md?p=12) constructed without a [construction](/usc/46/53701.md?p=3)-differential subsidy, the principal amount may not exceed 87.5 percent of the [actual cost](/usc/46/53701.md?p=1) or [depreciated actual cost](/usc/46/53701.md?p=4) of the facility or plantship.
- (c) **Security Involving Multiple Vessels.—** The principal amount of an [obligation](/usc/46/53701.md?p=9) having more than one [vessel](/usc/46/53501.md?p=9) as security for the guarantee may not exceed the sum of the principal amounts allowable for all the [vessels](/usc/46/53501.md?p=9).
- (d) **Prohibition on Uniform Percentage Limitations.—** The [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2) may not establish a percentage under any provision of [subsection (b)](#b) that is to be applied uniformly to all guarantees or commitments to guarantee made under that provision.
- (e) **Prohibition on Minimum Principal Amount.—** The [Secretary](/usc/46/53101.md?p=8) may not establish, as a condition of eligibility for a guarantee under this chapter, a minimum principal amount for an [obligation](/usc/46/53701.md?p=9) covering the [reconstruction](/usc/46/53701.md?p=3) or [reconditioning](/usc/46/53701.md?p=3) of a [fishing vessel](/usc/46/53701.md?p=6) or [fishery facility](/usc/46/53701.md?p=5-A). For purposes of this chapter, the [reconstruction](/usc/46/53701.md?p=3) or [reconditioning](/usc/46/53701.md?p=3) of a [fishing vessel](/usc/46/53701.md?p=6) or [fishery facility](/usc/46/53701.md?p=5-A) does not include the routine minor repair or maintenance of the [vessel](/usc/46/53501.md?p=9) or facility.

## Source credit

(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1609; Pub. L. 109–163, div. C, title XXXV, § 3507(a)(1)(C), (D), Jan. 6, 2006, 119 Stat. 3555; Pub. L. 110–181, div. C, title XXXV, § 3522(a)(10)(B), (b), Jan. 28, 2008, 122 Stat. 598; Pub. L. 116–92, div. C, title XXXV, § 3506(f), Dec. 20, 2019, 133 Stat. 1972.)

## Notes

| Historical and Revision Notes |  |  |
| --- | --- | --- |
| Revised<br>Section | Source (U.S. Code) | Source (Statutes at Large) |
| 53709(a) | 46 App.:1273(c). | June 29, 1936, ch. 858, title XI, § 1103(c), as added June 23, 1938, ch. 600, § 46, 52 Stat. 969; Aug. 15, 1953, ch. 513, § 1, 67 Stat. 626; Sept. 3, 1954, ch. 1265, § 3, 68 Stat. 1268; June 25, 1956, ch. 438, 70 Stat. 332; Aug. 7, 1956, ch. 1026, § 1(a), (c), (d), 70 Stat. 1087; Pub. L. 91–469, § 30, Oct. 21, 1970, 84 Stat. 1035; restated Pub. L. 92–507, § 3, Oct. 19, 1972, 86 Stat. 910; Pub. L. 97–31, § 12(136), Aug. 6, 1981, 95 Stat. 166. |
| 53709(b) | 46 App.:1274(b)(2). | June 29, 1936, ch. 858, title XI, § 1104A(b)(2), (last 2 sentences), (c)(1) (last sentence) [§ 1104A formerly § 1104], as added June 23, 1938, ch. 600, § 46, 52 Stat. 970; Aug. 4, 1939, ch. 417, § 14, 53 Stat. 1187; Sept. 28, 1950, ch. 1093, § 4, 64 Stat. 1078; Aug. 15, 1953, ch. 513, § 2, 67 Stat. 626; Sept. 3, 1954, ch. 1265, § 4, 68 Stat. 1269; Pub. L. 86–123, §§ 1(3), 2, July 31, 1959, 73 Stat. 269, 271; Pub. L. 86–127, § 1(3), (4), July 31, 1959, 73 Stat. 273; Pub. L. 86–518, § 1, June 12, 1960, 74 Stat. 216; Pub. L. 86–685, §§ 2, 3, Sept. 2, 1960, 74 Stat. 733; Pub. L. 90–341, June 15, 1968, 82 Stat. 180; Pub. L. 91–469, §§ 31, 32, Oct. 21, 1970, 84 Stat. 1035; restated Pub. L. 92–507, § 3, Oct. 19, 1972, 86 Stat. 910; Pub. L. 95–257, Apr. 7, 1978, 92 Stat. 194; Pub. L. 96–320, title II, § 202(c), Aug. 3, 1980, 94 Stat. 992; Pub. L. 96–561, title II, § 220(3)(B), Dec. 22, 1980, 94 Stat. 3293; Pub. L. 97–31, § 12(136), Aug. 6, 1981, 95 Stat. 166; Pub. L. 99–509, title V, § 5003, Oct. 21, 1986, 100 Stat. 1912; § 1104 renumbered as § 1104A, Pub. L. 101–380, title IV, § 4115(f)(1), Aug. 18, 1990, 104 Stat. 521; Pub. L. 103–160, div. A, title XIII, § 1356(3)(B), (C), Nov. 30, 1993, 107 Stat. 1813; Pub. L. 104–297, title III, § 302(a)(5), Oct. 11, 1996, 110 Stat. 3615. |
| 53709(c) | 46 App.:1274(c)(1) (last sentence). |  |
| 53709(d) | 46 App.:1274(i). | June 29, 1936, ch. 858, title XI, § 1104A(i), as added Pub. L. 103–160, div. A, title XIII, § 1356(3)(E), Nov. 30, 1993, 107 Stat. 1814. |
| 53709(e) | 46 App.:1274(b) (last 2 sentences). |  |

Subsections (a) and (d) are substituted for the source provisions for clarity and to eliminate unnecessary words.

### Editorial Notes

### References in Text

Section 509 of the Merchant Marine Act, 1936, referred to in subsec. (b)(2)(B), is section 509 of act June 29, 1936, ch. 858, 49 Stat. 1985, which is set out as a note under section 53101 of this title.

### Amendments

2019—Subsec. (b)(3) to (6). Pub. L. 116–92 redesignated pars. (4) and (5) as (3) and (4), respectively, and struck out former par. (3) and par. (6) which read as follows:

“(3) Barges.—For a barge constructed without a construction-differential subsidy or for which the subsidy has been repaid, the principal amount may not exceed 87.5 percent of the actual cost or depreciated actual cost.

“(6) Eligible export vessels.—For an eligible export vessel, the principal amount may not exceed 87.5 percent of the actual cost or depreciated actual cost.”

2008—Pub. L. 110–181, § 3522(b), repealed Pub. L. 109–163, § 3507(a)(1)(C), (D). See 2006 Amendment note below.

Subsecs. (a)(1), (b)(1), (2)(A), (d). Pub. L. 110–181, § 3522(a)(10)(B), incorporated the substance of the amendment by Pub. L. 109–163, § 3507(a)(1)(C), (D), into this section by inserting “or Administrator” after “Secretary”. See 2006 Amendment note below and section 18(a) of Pub. L. 109–304, set out as a Legislative Purpose and Construction note preceding section 101 of this title.

2006—Pub. L. 109–163, § 3507(a)(1)(C), (D), which directed the amendment of sections 1273(c) and 1274(b)(2), (c)(1), (i) of the former Appendix to this title from which this section was derived in part, was repealed by Pub. L. 110–181, § 3522(b). See 2008 Amendment note for subsecs. (a)(1), (b)(1), (2)(A), (d) and Historical and Revision notes above.