H.R. 8661 — Foreign Military Financing Loan Authorization Act of 2026

This section authorizes the Secretary of State to provide (1) direct loans under section 23 of the Arms Export Control Act (AECA) (i.e., for Foreign Military Sales) and (2) loan guarantees under section 24 of the AECA (i.e., for commercial defense sales) to countries or international organizations determined appropriate and consistent with U.S. national security interests, for financing the procurement of defense articles, defense services, and design and construction services. The Secretary may establish interest rates, repayment schedules, and terms for direct loans, subject to specified AECA terms and conditions, additional terms prescribed by the Secretary, and the availability of appropriated funds.

This section authorizes the Department of State to obligate funds deposited into the Foreign Military Sales Administrative Surcharge Fund—generated from a 3.2% surcharge on Foreign Military Sales (FMS) cases under the Arms Export Control Act (AECA)—for activities pursuant to the AECA (22 U.S.C. 2751 et seq.). (Thus, the funds may be used to defray administrative costs of the FMS program, which facilitates U.S. government sales of defense articles, services, and training to foreign governments.)

This section requires the Secretary of State, not later than 180 days after enactment and annually thereafter, to submit to the House Committee on Foreign Affairs and the Senate Committee on Foreign Relations a report that (1) describes any direct loan or loan guarantee provided pursuant to section 2(a); (2) identifies the recipient, amount, terms, and purpose of each such loan or guarantee; (3) assesses the impact of such loans or guarantees on U.S. national security objectives; and (4) assesses additional resources needed by the Department of State to carry out the Act.