Page 18

PUBLIC LAW 103-66—AUG. 10, 1993 107 STAT. 329 "(i) paragraph (1)(B), if the loan advance has reached the 12-year maturity reqmred under the loan agreement for the refinancing or prepayment; or "(ii) paragraph (1)(C), if the loan advance has not reached the 12-year maturity required under the loan agreement for the refinancing or prepayment. "(3) FINANCING OF PENALTY.— "(A) IN GENERAL.—In the case of a refinancing under this section, a borrower may, at the option of the borrower, meet the penalty requirements of paragraph (1) by— "(i) making a payment in the amount of the required penalty at the time of the refinancing; or "(ii) increasing the outstanding principal balance of the loan advance guaranteed by the Administrator that is being refinanced under this section by the amount of the penalty. "(B) INCREASED PRINCIPAL.—If a borrower meets the penalty requirements of paragraph (1) by increasing the outstanding principal balance of the loan advance that is being refinanced, the borrower shall make a payment at the time of the refinancing equal to 2.5 percent of the amount of the penalty that is added to the outstanding principal balance of the loan. "(c) LOAN TERMS AND CONDITIONS AFTER REFINANCING.— "(1) IN GENERAL.^^n the payment of a penalty as provided by subsection (b), the loan or loan advance, or any portion of the loan or advance, shall be refinanced at the interest rate described in paragraph (2) for a term selected by the borrower pursuant to paragraph (3), except that this paragraph shall not apply if the loan advance, or any portion of the advance, is prepaid by the borrower. "(2) INTEREST RATE.—^The interest rate on a loan refinanced under this section shall be determined to be equal to the then current cost of funds to the Department of the Treasury for obligations of comparable maturity to a term selected by the borrower pursuant to paragraph (3). "(3) LOAN TERM.—Subject to paragraph (4), the borrower of a loan that is refinanced under this section— "(A) shall select the term for which an interest rate shall be determined pursuant to paragraph (2); and "(B) at the end of the term (and any succeeding term selected by the borrower under this paragraph), may renew the loan for another term selected by the borrower. "(4) MAXIMUM TERM.—^The borrower may not select a term pursuant to paragraph (3) that ends after the maturity date set for the loan before the refinancing of the loan under this section. "(5) EXISTING LOANS.-—In the case of the refinancing of a loan of a borrower pursuant to this section and the inclusion of a penalty in the outstanding principal balance of the refinanced loan pursuant to subsection (bX3)— "(A) the refinancing and inclusion of the penalty shall not be subject to appropriations or limited by the amount provided during a fiscal year for new loans, loan guaran- tees, or other credit activity; "(B) the request of the borrower for the refinancing under this section may not be denied or delayed; and