2 U.S.C. § 661a — Definitions

For this subchapter: (1) “Direct loan” means Government funds paid to a non-Federal borrower under a contract requiring repayment, with or without interest. It includes buying or participating in another lender’s loan and financing that defers payment more than 90 days, including selling a Government asset on credit. It excludes acquiring a federally guaranteed loan to satisfy a default claim and Commodity Credit Corporation price-support loans. (2) “Direct loan obligation” means a Federal agency’s binding agreement to make a direct loan when the borrower fulfills specified conditions. (3) “Loan guarantee” means a guarantee, insurance, or other promise concerning payment of all or part of a non-Federal borrower’s debt to a non-Federal lender. It excludes insurance of deposits, shares, or other withdrawable accounts in financial institutions. (4) “Loan guarantee commitment” means a Federal agency’s binding agreement to make a guarantee when specified conditions are met by the borrower, lender, or another party to the guarantee agreement. (5)(A) “Cost” means the Government’s estimated long-term cost of a direct loan, guarantee, or modification, calculated using net present value. It excludes administrative costs and incidental effects on Government receipts or outlays. (B) A direct-loan cost is the net present value, when the loan is disbursed, of estimated loan disbursements; principal repayments; and interest and other payments by or to the Government over the loan’s life, adjusted for defaults, prepayments, fees, penalties, and other recoveries. It also includes changes in loan terms caused by a borrower’s exercise of an option in the loan contract. (C) A guarantee cost is the net present value, when the guaranteed loan is disbursed, of estimated Government payments for defaults, delinquencies, interest subsidies, or other payments, minus payments to the Government such as origination and other fees, penalties, and recoveries. It includes changes caused by an option exercised by the guaranteed lender under the guarantee contract or by the borrower under the guaranteed-loan contract. (D) A modification cost is the difference between the current net-present-value estimate of the remaining cash flows under the existing contract and the current estimate under the modified contract. (E) The discount rate for net present value is the average interest rate on marketable Treasury securities with a maturity similar to the cash flows being estimated. (F) When funds are obligated, estimated cost uses current assumptions for that fiscal year, adjusted for the loan contract’s terms. (6) “Credit program account” means the budget account receiving the appropriation for a direct-loan or guarantee program’s cost and paying that cost to the financing account. (7) “Financing account” means the non-budget account or accounts linked to each credit program account that hold balances, receive cost payments, and contain all other Government cash flows from direct-loan obligations or guarantee commitments made on or after October 1, 1991. (8) “Liquidating account” means the budget account containing all Government cash flows from obligations or commitments made before October 1, 1991. These accounts are shown in the budget on a cash basis. (9) “Modification” means Government action changing the estimated cost of an outstanding direct loan, direct-loan obligation, guarantee, or guarantee commitment from the current cash-flow estimate. It includes selling loan assets with or without recourse, buying guaranteed loans, and action based on new legislation or administrative discretion that directly or indirectly changes estimated cost, such as changing collection procedures. (10) “Current” has the meaning given in section 900(c)(9). This section does not define that term. (11) “Director” means the Director of the Office of Management and Budget.