---
kind: "section"
citation: "7 U.S.C. § 2008h"
title: "7"
title_heading: "Agriculture"
number: "2008h"
heading: "Loan and loan servicing limitations"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/7/2008h"
units:
  - "Chapter 50 — Agricultural Credit"
  - "Subchapter IV — Administrative Provisions"
---

# §2008h. Loan and loan servicing limitations

- (a) **Delinquent borrowers prohibited from obtaining direct operating loans—** The [Secretary](/usc/7/499a.md?p=b-2) may not make a direct operating loan under subchapter II to a [borrower](/usc/7/1991.md?p=b-1) who is delinquent on any loan made or guaranteed under this chapter.
- (b) **Prohibition of loans for borrowers that have received debt forgiveness—**
  - (1) **Prohibitions—** Except as provided in [paragraph (2)](#b-2)—
    - (A) the [Secretary](/usc/7/499a.md?p=b-2) may not make a loan under this chapter to a [borrower](/usc/7/1991.md?p=b-1) that has received [debt forgiveness](/usc/7/1991.md?p=a-12-A) on a loan made or guaranteed under this chapter; and
    - (B) the [Secretary](/usc/7/499a.md?p=b-2) may not guarantee a loan under this chapter to a [borrower](/usc/7/1991.md?p=b-1) that has received—
      - (i) [debt forgiveness](/usc/7/1991.md?p=a-12-A) after April 4, 1996, on a loan made or guaranteed under this chapter; or
      - (ii) received [debt forgiveness](/usc/7/1991.md?p=a-12-A) on more than 3 occasions on or before April 4, 1996.
  - (2) **Exceptions—**
    - (A) **In general—** The [Secretary](/usc/7/499a.md?p=b-2) may make a direct or guaranteed farm operating loan for paying annual farm or ranch operating expenses of a [borrower](/usc/7/1991.md?p=b-1) who—
      - (i) was restructured with a write-down under [section 2001 of this title](/usc/7/2001.md);
      - (ii) is current on payments under a confirmed reorganization plan under chapters[^1] 11, 12, or 13 of title 11; or
      - (iii) received [debt forgiveness](/usc/7/1991.md?p=a-12-A) on not more than 1 occasion resulting directly and primarily from a major disaster or emergency designated by the President on or after April 4, 1996, under the Robert T. Stafford Disaster Relief and Emergency Assistance Act ([42 U.S.C. 5121](/usc/42/5121.md) et seq.).
    - (B) **Emergency loans—**
      - (i) **In general—** The [Secretary](/usc/7/499a.md?p=b-2) may make an emergency loan under [section 1961 of this title](/usc/7/1961.md) to a [borrower](/usc/7/1991.md?p=b-1) that—
        - (I) on or before April 4, 1996, received not more than 1 [debt forgiveness](/usc/7/1991.md?p=a-12-A) on a loan made or guaranteed under this chapter; and
        - (II) after April 4, 1996, has not received [debt forgiveness](/usc/7/1991.md?p=a-12-A) on a loan made or guaranteed under this chapter.
      - (ii) **Restructured loans—** For purposes of [clause (i)](#b-2-B-i), a [borrower](/usc/7/1991.md?p=b-1) who was restructured with a write-down or restructuring under [section 2001 of this title](/usc/7/2001.md) shall not be considered to have received [debt forgiveness](/usc/7/1991.md?p=a-12-A) on a loan made or guaranteed under this chapter.
- (c) **No more than 1 debt forgiveness for borrower on direct loan—** The [Secretary](/usc/7/499a.md?p=b-2) may not provide to a [borrower](/usc/7/1991.md?p=b-1) [debt forgiveness](/usc/7/1991.md?p=a-12-A) on a [direct loan](/usc/7/1991.md?p=a-9) made under this chapter if the [borrower](/usc/7/1991.md?p=b-1) has received [debt forgiveness](/usc/7/1991.md?p=a-12-A) on another [direct loan](/usc/7/1991.md?p=a-9) made under this chapter.

## Footnotes

[^1]: So in original. Probably should be “chapter”.

## Source credit

(Pub. L. 87–128, title III, § 373, as added Pub. L. 104–127, title VI, § 648(b), Apr. 4, 1996, 110 Stat. 1104; amended Pub. L. 105–277, div. A, § 101(a) [title VIII, § 801], Oct. 21, 1998, 112 Stat. 2681, 2681–37; Pub. L. 107–171, title V, § 5319, May 13, 2002, 116 Stat. 348; Pub. L. 115–334, title V, § 5307, Dec. 20, 2018, 132 Stat. 4673.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in text, was in the original “this title”, meaning title III of Pub. L. 87–128, Aug. 8, 1961, 75 Stat. 307, known as the Consolidated Farm and Rural Development Act, which is classified principally to this chapter. For complete classification of title III to the Code, see Short Title note set out under section 1921 of this title and Tables.

The Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (b)(2)(A)(iii), is Pub. L. 93–288, May 22, 1974, 88 Stat. 143, which is classified principally to chapter 68 (§ 5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 5121 of Title 42 and Tables.

### Amendments

2018—Subsec. (b)(2)(B). Pub. L. 115–334 designated existing provisions as cl. (i) and inserted heading, redesignated former cls. (i) and (ii) as subcls. (I) and (II), respectively, of cl. (i), and added cl. (ii).

2002—Subsec. (b)(2)(A)(iii). Pub. L. 107–171 added cl. (iii).

1998—Subsec. (b). Pub. L. 105–277 added subsec. (b) and struck out heading and text of former subsec. (b). Text read as follows:

“(1) In general.—Except as provided in paragraph (2), the Secretary may not make or guarantee a loan under this chapter to a borrower who received debt forgiveness on a loan made or guaranteed under this chapter.

“(2) Exception.—The Secretary may make a direct or guaranteed farm operating loan for paying annual farm or ranch operating expenses of a borrower who was restructured with a write-down under section 2001 of this title.”