Interest Rates on Rural Development Loans.—

Sec. 113. Interest Rates on Rural Development Loans.—Section 307(a) of the Consolidated Farmers Home Administration Act of 1961 is amended by inserting before the period at the end of the second sentence thereof the following: “; except that loans (other than loans to public bodies or nonprofit associations (including Indian tribes on Federal and State reservations and other federally recognized Indian tribal groups) for community facilities, or loans of a type authorized by section 306(a) (1) prior to its amendment by the Rural Development Act of 1972) made or insured under section 304(b), 306(a) (1), or 310B shall— (1) when made other than as guaranteed loans, bear interest at a rate, prescribed by the Secretary, not less than a rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States comparable to the average maturities of such loans, adjusted in the judgment of the Secretary of the Treasury to provide for a rate comparable to the rates prevailing in the private market for similar loans and considering the Secretary’s insurance of the loans, plus an additional charge, prescribed by the Secretary, to cover the Secretary’s losses and cost of administration, which charge shall be deposited in the Rural Development Insurance Fund: Provided, That the rate so prescribed shall be adjusted to the nearest one-eighth of 1 per centum; and (2) when made as guaranteed loans, bear interest, at such rate as may be agreed upon by the borrower and the lender”.