(a) In general

A contract of insurance or guarantee executed by the Secretary under this chapter shall be an obligation supported by the full faith and credit of the United States.

(b) Contestability

Terms Used In 7 USC 1928

  • Contract: A legal written agreement that becomes binding when signed.
  • contract of insurance: includes a contract of guarantee. See 7 USC 1991
  • Fraud: Intentional deception resulting in injury to another.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.

A contract of insurance or guarantee executed by the Secretary under this chapter shall be incontestable except for fraud or misrepresentation that the lender or any holder—

(1) has actual knowledge of at the time the contract or guarantee is executed; or

(2) participates in or condones.

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