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Code · BILL · 113th Congress · S. 954 (Engrossed in Senate) — To reauthorize agricultural programs through 2018. · Sec. 5001

Sec. 5001. Farmer loans, servicing, and other assistance under the Consolidated Farm and Rural Development Act

22,787 words·~104 min read·/bill/113/s/954/es/section-5001

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

The Consolidated Farm and Rural Development Act (as amended by section 6001) is amended by inserting after section 3002 the following: The Secretary may make or guarantee a farm ownership loan under this chapter to an eligible farmer for a farm in the United States. A farmer shall be eligible under subsection
(a)only— if the farmer, or, in the case of an entity, 1 or more individuals holding a majority interest in the entity— is a citizen of the United States; and in the case of a direct loan, has training or farming experience that the Secretary determines is sufficient to ensure a reasonable prospect of success in the farming operation proposed by the farmer; in the case of a farmer that is an individual, if the farmer is or proposes to become an owner and operator of a farm that is not larger than a family farm; or in the case of a lessee-operator of a farm located in the State of Hawaii, if the Secretary determines that— the farm is not larger than a family farm; the farm cannot be acquired in fee simple by the lessee-operator; adequate security is provided for the loan with respect to the farm for which the lessee-operator applies under this chapter; and there is a reasonable probability of accomplishing the objectives and repayment of the loan; in the case of a farmer that is a cooperative, corporation, partnership, trust, limited liability company, joint operation, or such other legal entity as the Secretary determines to be appropriate, with respect to the entity and each farm in which the entity has an ownership or operator interest— if— a majority interest is held by individuals who are related by blood or marriage, as defined by the Secretary; at least 1 of the individuals is or will be the operator of the farm; and the farm is not larger than a family farm; if— all of the individuals who are or propose to become owners or operators of a farm are related by blood or marriage; all of the individuals are or propose to become operators of the farm; and each of the interests of the individuals separately constitutes not larger than a family farm even if the ownership interests of the individuals collectively constitute larger than a family farm; or if— the entire interest is not held by individuals who are related by blood or marriage, as defined by the Secretary; all of the individuals are or propose to become farm operators; and the farm is not larger than a family farm; in the case of an entity that is, or will become within a reasonable period of time, as determined by the Secretary, only the operator of a family farm, if the 1 or more individuals who are the owners of the family farm own— a percentage of the family farm that exceeds 50 percent; or such other percentage as the Secretary determines to be appropriate; in the case of an operator described in paragraph
(3)that is owned, in whole or in part, by 1 or more other entities, if each of the individuals that have a direct or indirect ownership interest in such other entities also have a direct ownership interest in the entity; and if the farmer (or in the case of a farmer that is an entity, the 1 or more individuals that hold a majority interest in the entity) is unable to obtain credit elsewhere. Subject to paragraph (2), the Secretary may make a direct loan under this chapter only to a farmer who has participated in business operations of a farm for not less than 3 years (or has other acceptable experience for a period of time determined by the Secretary) and— is a qualified beginning farmer; has not received a previous direct farm ownership loan made under this chapter; or has not received a direct farm ownership loan under this chapter more than 10 years before the date on which the new loan would be made. The operation of an enterprise by a youth under section 3201(d) shall not be considered the operation of a farm for purposes of paragraph (1). A farmer may use a direct loan made under this chapter only— to acquire or enlarge a farm; to make capital improvements to a farm; to pay loan closing costs related to acquiring, enlarging, or improving a farm; to pay for activities to promote soil and water conservation and protection described in section 3103 on a farm; or to refinance a temporary bridge loan made by a commercial or cooperative lender to a farmer for the acquisition of land for a farm, if— the Secretary approved an application for a direct farm ownership loan to the farmer for acquisition of the land; and funds for direct farm ownership loans under section 3201(a) were not available at the time at which the application was approved. A farmer may use a loan guaranteed under this chapter only— to acquire or enlarge a farm; to make capital improvements to a farm; to pay loan closing costs related to acquiring, enlarging, or improving a farm; to pay for activities to promote soil and water conservation and protection described in section 3103 on a farm; or to refinance indebtedness. In making or guaranteeing a loan under this chapter for purchase of a farm, the Secretary shall give preference to a person who— has a dependent family; to the extent practicable, is able to make an initial down payment on the farm; or is an owner of livestock or farm equipment that is necessary to successfully carry out farming operations. The Secretary may not make a loan to a farmer under this chapter unless the farmer has, or agrees to obtain, hazard insurance on any real property to be acquired or improved with the loan. The Secretary may make or guarantee qualified conservation loans to eligible borrowers under this section. In this section: The term conservation plan means a plan, approved by the Secretary, that, for a farming operation, identifies the conservation activities that will be addressed with loan funds provided under this section, including— the installation of conservation structures to address soil, water, and related resources; the establishment of forest cover for sustained yield timber management, erosion control, or shelter belt purposes; the installation of water conservation measures; the installation of waste management systems; the establishment or improvement of permanent pasture; compliance with section 1212 of the Food Security Act of 1985 ( 16 U.S.C. 3812 ); and other purposes consistent with the plan, including the adoption of any other emerging or existing conservation practices, techniques, or technologies approved by the Secretary. The term qualified conservation loan means a loan, the proceeds of which are used to cover the costs to the borrower of carrying out a qualified conservation project. The term qualified conservation project means conservation measures that address provisions of a conservation plan of the eligible borrower. The Secretary may make or guarantee loans to farmers. To be eligible for a loan under this section, applicants shall meet the citizenship and training and experience requirements of section 3101(b). In making or guaranteeing loans under this section, the Secretary shall give priority to— qualified beginning farmers and socially disadvantaged farmers; owners or tenants who use the loans to convert to sustainable or organic agricultural production systems; and producers who use the loans to build conservation structures or establish conservation practices to comply with section 1212 of the Food Security Act of 1985 ( 16 U.S.C. 3812 ). The portion of a loan that the Secretary may guarantee under this section shall not exceed 75 percent of the principal amount of the loan. The Secretary shall ensure, to the maximum extent practicable, that loans made or guaranteed under this section are distributed across diverse geographic regions. The provisions of paragraphs
(1)and
(3)of section 3406(a) shall not apply to loans made or guaranteed under this section. For each of fiscal years 2013 through 2018, there are authorized to be appropriated to the Secretary such sums as are necessary to carry out this section. The Secretary shall make or guarantee no loan under sections 3101, 3102, 3103, 3106, and 3107 that would cause the unpaid indebtedness under those sections of any 1 borrower to exceed the lesser of— the value of the farm or other security, or in the case of a loan made by the Secretary, $300,000; or in the case of a loan guaranteed by the Secretary, $700,000 (as modified under paragraph (2)). The amount specified in paragraph (1)(B)(ii) shall be— increased, beginning with fiscal year 2000, by the inflation percentage applicable to the fiscal year in which the loan is guaranteed; and reduced by the amount of any unpaid indebtedness of the borrower on loans under chapter 2 that are guaranteed by the Secretary. In determining the value of the farm, the Secretary shall consider appraisals made by competent appraisers under rules established by the Secretary. For purposes of this section, the inflation percentage applicable to a fiscal year is the percentage (if any) by which— the average of the Prices Paid By Farmers Index (as compiled by the National Agricultural Statistics Service of the Department) for the 12-month period ending on August 31 of the immediately preceding fiscal year; exceeds the average of that index (as so defined) for the 12-month period ending on August 31, 1996. The period for repayment of a loan under this chapter shall not exceed 40 years. Except as otherwise provided in this title, the interest rate on a loan under this chapter shall be determined by the Secretary at a rate— not to exceed the sum obtained by adding— the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturity of the loan; and an amount not to exceed 1 percent, as determined by the Secretary; and adjusted to the nearest 1/8 of 1 percent. Except as provided in paragraph (3), the interest rate on a loan (other than a guaranteed loan) under section 3106 shall be determined by the Secretary at a rate that is— not greater than the sum obtained by adding— an amount that does not exceed 1/2 of the current average market yield on outstanding marketable obligations of the United States with maturities of 5 years; and an amount not to exceed 1 percent per year, as the Secretary determines is appropriate; and not less than 5 percent per year. If a direct farm ownership loan is made under this chapter as part of a joint financing arrangement and the amount of the direct farm ownership loan does not exceed 50 percent of the total principal amount financed under the arrangement, the interest rate on the direct farm ownership loan shall be at least 4 percent annually. The interest rate on a loan made under this chapter as a guaranteed loan shall be such rate as may be agreed on by the borrower and the lender, but not in excess of any rate determined by the Secretary. A borrower of a loan made or guaranteed under this chapter shall pay such fees and other charges as the Secretary may require, and prepay to the Secretary such taxes and insurance as the Secretary may require, on such terms and conditions as the Secretary may prescribe. The Secretary shall take as security for an obligation entered into in connection with a loan, a mortgage on a farm with respect to which the loan is made or such other security as the Secretary may require. An instrument for security under paragraph
(1)may constitute a lien running to the United States notwithstanding the fact that the note for the security may be held by a lender other than the United States. A borrower may use the same collateral to secure 2 or more loans made or guaranteed under this chapter, except that the outstanding amount of the loans may not exceed the total value of the collateral. In the case of a farm ownership loan made after December 23, 1985, unless appraised values of the rights to oil, gas, or other minerals are specifically included as part of the appraised value of collateral securing the loan, the rights to oil, gas, or other minerals located under the property shall not be considered part of the collateral securing the loan. Nothing in this subsection prevents the inclusion of, as part of the collateral securing the loan, any payment or other compensation the borrower may receive for damages to the surface of the collateral real estate resulting from the exploration for or recovery of minerals. The Secretary may not— require any borrower to provide additional collateral to secure a farmer program loan made or guaranteed under this subtitle, if the borrower is current in the payment of principal and interest on the loan; or bring any action to foreclose, or otherwise liquidate, the loan as a result of the failure of a borrower to provide additional collateral to secure the loan, if the borrower was current in the payment of principal and interest on the loan at the time the additional collateral was requested. The Secretary may make or guarantee a limited-resource loan for any of the purposes specified in sections 3102(a) or 3103(a) to a farmer in the United States who— in the case of an entity, all members, stockholders, or partners are eligible under section 3101(b); has a low income; and demonstrates a need to maximize the income of the farmer from farming operations. A loan made or guaranteed under this section shall be repayable in such installments as the Secretary determines will provide for reduced payments during the initial repayment period of the loan and larger payments during the remainder of the repayment period of the loan. Except as provided in section 3105(b)(3) and in section 3204(b)(3), the interest rate on loans (other than guaranteed loans) under this section shall not be— greater than the sum obtained by adding— an amount that does not exceed 1/2 of the current average market yield on outstanding marketable obligations of the United States with maturities of 5 years; and an amount not exceeding 1 percent per year, as the Secretary determines is appropriate; or less than 5 percent per year. Notwithstanding any other provision of this chapter, the Secretary shall establish, under the farm ownership loan program established under this chapter, a program under which loans shall be made under this section to a qualified beginning farmer or a socially disadvantaged farmer for a downpayment on a farm ownership loan. The Secretary shall be the primary coordinator of credit supervision for the downpayment loan program established under this section, in consultation with a commercial or cooperative lender and, if applicable, a contracting credit counseling service selected under section 3420(c). Each loan made under this section shall be in an amount that does not exceed 45 percent of the lesser of— the purchase price of the farm to be acquired; the appraised value of the farm to be acquired; or $667,000. The interest rate on any loan made by the Secretary under this section shall be a rate equal to the greater of— the difference between— 4 percent; and the interest rate for farm ownership loans under this chapter; or 1.5 percent. Each loan under this section shall be made for a period of 20 years or less, at the option of the borrower. Each borrower of a loan under this section shall repay the loan to the Secretary in equal annual installments. The Secretary shall retain an interest in each farm acquired with a loan made under this section that shall— be secured by the farm; be junior only to such interests in the farm as may be conveyed at the time of acquisition to the person (including a lender) from whom the borrower obtained a loan used to acquire the farm; and require the borrower to obtain the permission of the Secretary before the borrower may grant an additional security interest in the farm. The Secretary shall not make a loan under this section to any borrower with respect to a farm if the contribution of the borrower to the down payment on the farm will be less than 5 percent of the purchase price of the farm. The Secretary shall not make a loan under this section with respect to a farm if the farm is to be acquired with other financing that contains any of the following conditions: The financing is to be amortized over a period of less than 30 years. A balloon payment will be due on the financing during the 20-year period beginning on the date on which the loan is to be made by the Secretary. In carrying out this section, the Secretary shall, to the maximum extent practicable— facilitate the transfer of farms from retiring farmers to persons eligible for insured loans under this subtitle; make efforts to widely publicize the availability of loans under this section among— potentially eligible recipients of the loans; retiring farmers; and applicants for farm ownership loans under this chapter; encourage retiring farmers to assist in the sale of their farms to qualified beginning farmers and socially disadvantaged farmers providing seller financing; coordinate the loan program established by this section with State programs that provide farm ownership or operating loans for beginning farmers or socially disadvantaged farmers; and establish annual performance goals to promote the use of the down payment loan program and other joint financing arrangements as the preferred choice for direct real estate loans made by any lender to a qualified beginning farmer or socially disadvantaged farmer. The Secretary shall, in accordance with this section, guarantee a loan made by a private seller of a farm to a qualified beginning farmer or socially disadvantaged farmer on a contract land sales basis. To be eligible for a loan guarantee under subsection (a)— the qualified beginning farmer or socially disadvantaged farmer shall— on the date the contract land sale that is subject of the loan is complete, own and operate the farm that is the subject of the contract land sale; have a credit history that— includes a record of satisfactory debt repayment, as determined by the Secretary; and is acceptable to the Secretary; and demonstrate to the Secretary that the farmer is unable to obtain sufficient credit without a guarantee to finance any actual need of the farmer at a reasonable rate or term; and the loan shall meet applicable underwriting criteria, as determined by the Secretary. The Secretary shall not provide a loan guarantee under subsection
(a)if— the contribution of the qualified beginning farmer or socially disadvantaged farmer to the down payment for the farm that is the subject of the contract land sale would be less than 5 percent of the purchase price of the farm; or the purchase price or the appraisal value of the farm that is the subject of the contract land sale is greater than $500,000. A loan guarantee under this section shall be in effect for the 10-year period beginning on the date on which the guarantee is provided. A private seller of a farm who makes a loan guaranteed by the Secretary under subsection
(a)may select— a prompt payment guarantee plan, which shall cover— 3 amortized annual installments; or an amount equal to 3 annual installments (including an amount equal to the total cost of any tax and insurance incurred during the period covered by the annual installments); or a standard guarantee plan, which shall cover an amount equal to 90 percent of the outstanding principal of the loan. To be eligible for a standard guarantee plan referred to in paragraph (1)(B), a private seller shall— secure a commercial lending institution or similar entity, as determined by the Secretary, to serve as an escrow agent; or in cooperation with the farmer, use an appropriate alternate arrangement, as determined by the Secretary. The Secretary may make or guarantee an operating loan under this chapter to an eligible farmer in the United States. A farmer shall be eligible under subsection
(a)only— if the farmer, or an individual holding a majority interest in the farmer— is a citizen of the United States; and has training or farming experience that the Secretary determines is sufficient to ensure a reasonable prospect of success in the farming operation proposed by the farmer; in the case of a farmer that is an individual, if the farmer is or proposes to become an operator of a farm that is not larger than a family farm; in the case of a farmer that is a cooperative, corporation, partnership, trust, limited liability company, joint operation, or such other legal entity as the Secretary determines to be appropriate, with respect to the entity and each farm in which the entity has an ownership or operator interest— if— a majority interest is held by individuals who are related by blood or marriage, as defined by the Secretary; at least 1 of the individuals is or will be the operator of the farm; and the farm is not larger than a family farm; if— all of the individuals who are or propose to become owners or operators of a farm are related by blood or marriage; all of the individuals are or propose to become operators of the farm; and each of the interests of the individuals separately constitutes not larger than a family farm even if the ownership interests of the individuals collectively constitute larger than a family farm; or if— the entire interest is not held by individuals who are related by blood or marriage, as defined by the Secretary; all of the individuals are or propose to become farm operators; and the farm is not larger than a family farm; in the case of an operator described in paragraph
(3)that is owned, in whole or in part by 1 or more other entities, if not less than 75 percent of the ownership interests of each other entity is owned directly or indirectly by 1 or more individuals who own the family farm; and if the farmer (or in the case of a farmer that is an entity, the 1 or more individuals that hold a majority interest in the entity) is unable to obtain credit elsewhere. The Secretary may make a direct loan under this chapter only to a farmer who— is a qualified beginning farmer; has not received a previous direct operating loan made under this chapter; or has not received a direct operating loan made under this chapter for a total of 10 years, plus any year the farmer or rancher did not receive a direct operating loan after the year in which the borrower initially received a direct operating loan under this chapter, as determined by the Secretary. In this subsection, the term direct operating loan shall not include a loan made to a youth under subsection (d). The Secretary shall waive the limitation under paragraph (1)(C) for a direct loan made under this chapter to a farmer whose farm land is subject to the jurisdiction of an Indian tribe and whose loan is secured by 1 or more security instruments that are subject to the jurisdiction of an Indian tribe if the Secretary determines that commercial credit is not generally available for such farm operations. On a case-by-case determination not subject to administrative appeal, the Secretary may grant a borrower a waiver, 1 time only for a period of 2 years, of the limitation under paragraph (1)(C) for a direct operating loan if the borrower demonstrates to the satisfaction of the Secretary that— the borrower has a viable farm operation; the borrower applied for commercial credit from at least 2 commercial lenders; the borrower was unable to obtain a commercial loan (including a loan guaranteed by the Secretary); and the borrower successfully has completed, or will complete within 1 year, borrower training under section 3419 (from which requirement the Secretary shall not grant a waiver under section 3419(f)). Notwithstanding subsection (b), except for citizenship and credit requirements, a loan may be made under this chapter to a youth who is a rural resident to enable the youth to operate an enterprise in connection with the participation in a youth organization, as determined by the Secretary. A youth receiving a loan under this subsection who executes a promissory note for the loan shall incur full personal liability for the indebtedness evidenced by the note, in accordance with the terms of the note, free of any disability of minority. The Secretary may accept the personal liability of a cosigner of a promissory note for a loan under this subsection, in addition to the personal liability of the youth borrower. The operation of an enterprise by a youth under this subsection shall not be considered the operation of a farm under this subtitle. Notwithstanding any other provision of law, if a borrower becomes delinquent with respect to a youth loan made under this subsection, the borrower shall not become ineligible, as a result of the delinquency, to receive loans and loan guarantees from the Federal government to pay for education expenses of the borrower. In this subsection, the term gleaner means an entity that— collects edible, surplus food that would be thrown away and distributes the food to agencies or nonprofit organizations that feed the hungry; or harvests for free distribution to the needy, or for donation to agencies or nonprofit organizations for ultimate distribution to the needy, an agricultural crop that has been donated by the owner of the crop. Not later than 180 days after the date of enactment of this subsection, the Secretary shall establish, within the operating loan program established under this chapter, a pilot program under which the Secretary makes loans available to eligible entities to assist the entities in providing food to the hungry. In addition to any other person eligible under the terms and conditions of the operating loan program established under this chapter, gleaners shall be eligible to receive loans under this subsection. Each loan issued under the program shall be in an amount of not less than $500 and not more than $5,000. If the eligible recipients in a State do not use the full allocation of loans that are available to eligible recipients in the State under this subsection, the Secretary may use any unused amounts to make loans available to eligible entities in other States in accordance with this subsection. The Secretary shall process any loan application submitted under the program not later than 30 days after the date on which the application was submitted. The Secretary shall take any measure the Secretary determines necessary to expedite any application submitted under the program. The Secretary shall take measures to reduce any paperwork requirements for loans under the program. The Secretary shall take such actions as are necessary to ensure the integrity of the program established under this subsection. Of funds that are made available to carry out this chapter, the Secretary shall use to carry out this subsection a total amount of not more than $500,000. Not later than 180 days after the maximum amount of funds are used to carry out this subsection under paragraph (8), the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes the results of the pilot program and the feasibility of expanding the program. A direct loan may be made under this chapter only— to pay the costs incident to reorganizing a farm for more profitable operation; to purchase livestock, poultry, or farm equipment; to purchase feed, seed, fertilizer, insecticide, or farm supplies, or to meet other essential farm operating expenses, including cash rent; to finance land or water development, use, or conservation; to pay loan closing costs; to assist a farmer in changing the equipment, facilities, or methods of operation of a farm to comply with a standard promulgated under section 6 of the Occupational Safety and Health Act of 1970 ( 29 U.S.C. 655 ) or a standard adopted by a State under a plan approved under section 18 of that Act ( 29 U.S.C. 667 ), if the Secretary determines that without assistance under this paragraph the farmer is likely to suffer substantial economic injury in complying with the standard; to train a limited-resource borrower receiving a loan under section 3106 in maintaining records of farming operations; to train a borrower under section 3419; to refinance the indebtedness of a borrower, if the borrower— has refinanced a loan under this chapter not more than 4 times previously; and is a direct loan borrower under this subtitle at the time of the refinancing and has suffered a qualifying loss because of a natural or major disaster or emergency; or is refinancing a debt obtained from a creditor other than the Secretary; to provide other farm or home needs, including family subsistence; or to assist a farmer in the production of a locally or regionally produced agricultural food product (as defined in section 3601(e)(11)(A)), including to qualified producers engaged in direct-to-consumer marketing, direct-to-institution marketing, or direct-to-store marketing, business, or activities that produce a value-added agricultural product (as defined in section 231(a) of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 1632a(a))). A loan may be guaranteed under this chapter only— to pay the costs incident to reorganizing a farm for more profitable operation; to purchase livestock, poultry, or farm equipment; to purchase feed, seed, fertilizer, insecticide, or farm supplies, or to meet other essential farm operating expenses, including cash rent; to finance land or water development, use, or conservation; to refinance indebtedness; to pay loan closing costs; to assist a farmer in changing the equipment, facilities, or methods of operation of a farm to comply with a standard promulgated under section 6 of the Occupational Safety and Health Act of 1970 ( 29 U.S.C. 655 ) or a standard adopted by a State under a plan approved under section 18 of that Act ( 29 U.S.C. 667 ), if the Secretary determines that without assistance under this paragraph the farmer is likely to suffer substantial economic injury due to compliance with the standard; to train a borrower under section 3419; or to provide other farm or home needs, including family subsistence. The Secretary may not make a loan to a farmer under this chapter unless the farmer has, or agrees to obtain, hazard insurance on the property to be acquired with the loan. Notwithstanding any other provision of this title, the Secretary may reserve a portion of any loan made under this chapter to be placed in an unsupervised bank account that may be used at the discretion of the borrower for the basic family needs of the borrower and the immediate family of the borrower. The size of the reserve shall not exceed the lesser of— 10 percent of the loan; $5,000; or the amount needed to provide for the basic family needs of the borrower and the immediate family of the borrower for 3 calendar months. The Secretary shall ensure that loan officers processing loans under subsection (a)(11) receive appropriate training to serve borrowers and potential borrowers engaged in local and regional food production. The Secretary shall develop ways to determine unit prices (or other appropriate forms of valuation) for crops and other agricultural products, the end use of which is intended to be in locally or regionally produced agricultural food products, to facilitate lending to local and regional food producers. The Secretary shall implement a mechanism for local and regional food producers to establish price history for the crops and other agricultural products produced by local and regional food producers. The Secretary shall develop and implement an outreach strategy to engage and provide loan services to local and regional food producers. The Secretary may not make or guarantee a loan under this chapter— that would cause the total principal indebtedness outstanding at any 1 time for loans made under this chapter to any 1 borrower to exceed— in the case of a loan made by the Secretary, $300,000; or in the case of a loan guaranteed by the Secretary, $700,000 (as modified under paragraph (2)); or for the purchasing or leasing of land other than for cash rent, or for carrying on a land leasing or land purchasing program. The amount specified in paragraph (1)(A)(ii) shall be— increased, beginning with fiscal year 2000, by the inflation percentage applicable to the fiscal year in which the loan is guaranteed; and reduced by the unpaid indebtedness of the borrower on loans under sections specified in section 3104 that are guaranteed by the Secretary. For purposes of this section, the inflation percentage applicable to a fiscal year is the percentage (if any) by which— the average of the Prices Paid By Farmers Index (as compiled by the National Agricultural Statistics Service of the Department) for the 12-month period ending on August 31 of the immediately preceding fiscal year; exceeds the average of that index (as so defined) for the 12-month period ending on August 31, 1996. A borrower of a loan made under this chapter shall secure the loan with the full personal liability of the borrower and such other security as the Secretary may prescribe. Except as provided in paragraphs
(2)and (3), the interest rate on a loan made under this chapter (other than a guaranteed loan) shall be determined by the Secretary at a rate not to exceed the sum obtained by adding— the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturity of the loan; and an additional charge not to exceed 1 percent, as determined by the Secretary. The sum obtained under subparagraph
(A)shall be adjusted to the nearest 1/8 of 1 percent. The interest rate on a guaranteed loan made under this chapter shall be such rate as may be agreed on by the borrower and the lender, but may not exceed any rate prescribed by the Secretary. The interest rate on a direct loan made under this chapter to a low-income, limited-resource borrower shall be determined by the Secretary at a rate that is not— greater than the sum obtained by adding— an amount that does not exceed 1/2 of the current average market yield on outstanding marketable obligations of the United States with a maturity of 5 years; and an amount not to exceed 1 percent per year, as the Secretary determines is appropriate; or less than 5 percent per year. The period for repayment of a loan made under this chapter may not exceed 7 years. A loan made or guaranteed by the Secretary under this chapter may be in the form of a line-of-credit loan. A line-of-credit loan under paragraph
(1)shall terminate not later than 5 years after the date that the loan is made or guaranteed. For purposes of determining eligibility for an operating loan under this chapter, each year during which a farmer takes an advance or draws on a line-of-credit loan the farmer shall be considered as having received an operating loan for 1 year. If a borrower does not pay an installment on a line-of-credit loan on schedule, the borrower may not take an advance or draw on the line-of-credit, unless the Secretary determines that— the failure of the borrower to pay on schedule was due to unusual conditions that the borrower could not control; and the borrower will reduce the line-of-credit balance to the scheduled level at the end of— the production cycle; or the marketing of the agricultural products of the borrower. A line-of-credit loan may be used to finance the production or marketing of an agricultural commodity that is eligible for a price support program of the Department. The Secretary shall make or guarantee an emergency loan under this chapter to an eligible farmer (including a commercial fisherman) only to the extent and in such amounts as provided in advance in appropriation Acts. An established farmer shall be eligible under subsection
(a)only— if the farmer or an individual holding a majority interest in the farmer— is a citizen of the United States; and has experience and resources that the Secretary determines are sufficient to ensure a reasonable prospect of success in the farming operation proposed by the farmer; in the case of a farmer that is an individual, if the farmer is— in the case of a loan for a purpose under chapter 1, an owner, operator, or lessee-operator described in section 3101(b)(2); and in the case of a loan for a purpose under chapter 2, an operator of a farm that is not larger than a family farm; in the case of a farmer that is a cooperative, corporation, partnership, trust, limited liability company, joint operation, or such other legal entity as the Secretary determines to be appropriate, with respect to the entity and each farm in which the entity has an ownership or operator interest— if— a majority interest is held by individuals who are related by blood or marriage, as defined by the Secretary; at least 1 of the individuals is or will be the operator of the farm; and the farm is not larger than a family farm; if— all of the individuals who are or propose to become owners or operators of a farm are related by blood or marriage; all of the individuals are or propose to become operators of the farm; and each of the interests of the individuals separately constitutes not larger than a family farm even if the ownership interests of the individuals collectively constitute larger than a family farm; or if— the entire interest is not held by individuals who are related by blood or marriage, as defined by the Secretary; all of the individuals are or propose to become farm operators; and the farm is not larger than a family farm; if the entity is owned, in whole or in part, by 1 or more other entities and each individual who is an owner of the family farm involved has a direct or indirect ownership interest in each of the other entities; if the farmer (or in the case of a farmer that is an entity, the 1 or more individuals that hold a majority interest in the entity) is unable to obtain credit elsewhere; and if the Secretary finds that the operations of the farmer have been substantially affected by— a natural or major disaster or emergency designated by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5121 et seq. ); or a quarantine imposed by the Secretary under the Plant Protection Act ( 7 U.S.C. 7701 et seq. ) or the Animal Health Protection Act ( 7 U.S.C. 8301 et seq. ); or if the farmer conducts farming operations in a county or a county contiguous to a county in which the Secretary has found that farming operations have been substantially affected by a natural or major disaster or emergency. The Secretary shall accept an application for a loan under this chapter from a farmer at any time during the 8-month period beginning on the date that— the Secretary determines that farming operations of the farmer have been substantially affected by— a quarantine imposed by the Secretary under the Plant Protection Act ( 7 U.S.C. 7701 et seq. ) or the Animal Health Protection Act ( 7 U.S.C. 8301 et seq. ); or a natural disaster; or the President makes a major disaster or emergency designation with respect to the affected county of the farmer referred to in subsection (b)(5)(B). The Secretary may not make a loan to a farmer under this chapter to cover a property loss unless the farmer had hazard insurance that insured the property at the time of the loss. The Secretary shall conduct the loan program under this chapter in a manner that will foster and encourage the family farm system of agriculture, consistent with the reaffirmation of policy and declaration of the intent of Congress contained in section 102(a) of the Food and Agriculture Act of 1977 ( 7 U.S.C. 2266(a) ). Subject to the limitations on the amounts of loans provided in section 3303(a), a loan may be made or guaranteed under this chapter for— any purpose authorized for a loan under chapter 1 or 2; and crop or livestock purposes that are— necessitated by a quarantine, natural disaster, major disaster, or emergency; and considered desirable by the farmer. The Secretary may not make or guarantee a loan under this chapter to a borrower who has suffered a loss in an amount that— exceeds the actual loss caused by a disaster; or would cause the total indebtedness of the borrower under this chapter to exceed $500,000. Any portion of a loan under this chapter up to the amount of the actual loss suffered by a farmer caused by a disaster shall be at a rate prescribed by the Secretary, but not in excess of 8 percent per annum. In the case of a guaranteed loan under this chapter, the Secretary may pay an interest subsidy to the lender for any portion of the loan up to the amount of the actual loss suffered by a farmer caused by a disaster. Subject to paragraph (2), a loan under this chapter shall be repayable at such times as the Secretary may determine, considering the purpose of the loan and the nature and effect of the disaster, but not later than the maximum repayment period allowed for a loan for a similar purpose under chapters 1 and 2. The Secretary may, if the loan is for a purpose described in chapter 2 and the Secretary determines that the need of the loan applicant justifies the longer repayment period, make the loan repayable at the end of a period of more than 7 years, but not more than 20 years. A borrower of a loan made under this chapter shall secure the loan with the full personal liability of the borrower and such other security as the Secretary may prescribe. Subject to paragraph (3), the Secretary may not make or guarantee a loan under this chapter unless the security for the loan is adequate to ensure repayment of the loan. If adequate security for a loan under this chapter is not available because of a disaster, the Secretary shall accept as security any collateral that is available if the Secretary is confident that the collateral and the repayment ability of the farmer are adequate security for the loan. If a farm asset (including land, livestock, or equipment) is used as collateral to secure a loan applied for under this chapter and the governor of the State in which the farm is located requests assistance under this chapter or the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5121 et seq. ) for the portion of the State in which the asset is located, the Secretary shall establish the value of the asset as of the day before the occurrence of the natural or major disaster or emergency. In the case of a loan made, but not guaranteed, under section 3301, the Secretary shall review the loan 3 years after the loan is made, and every 2 years thereafter for the term of the loan. If, based on a review under paragraph (1), the Secretary determines that the borrower is able to obtain a loan from a non-Federal source at reasonable rates and terms, the borrower shall, on request by the Secretary, apply for, and accept, a non-Federal loan in a sufficient amount to repay the Secretary. The Secretary shall make or guarantee a loan under this chapter to an eligible farmer for production losses if a single enterprise that constitutes a basic part of the farming operation of the farmer has sustained at least a 30 percent loss in normal per acre or per animal production, or such lesser percentage as the Secretary may determine, as a result of a disaster. A percentage loss under subsection
(a)shall be based on the average monthly price in effect for the previous crop or calendar year, as appropriate. A loan under subsection
(a)shall be in an amount that is equal to 80 percent, or such greater percentage as the Secretary may determine, of the total calculated actual production loss sustained by the farmer. The fund established pursuant to section 11(a) of the Bankhead-Jones Farm Tenant Act (60 Stat. 1075, chapter 964) shall be known as the Agricultural Credit Insurance Fund (referred to in this section as the Fund , unless the context otherwise requires) for the discharge of the obligations of the Secretary under agreements insuring loans under this subtitle and loans and mortgages insured under prior authority. The Secretary may provide financial assistance to a borrower for a purpose provided in this subtitle by guaranteeing a loan made by any Federal or State chartered bank, savings and loan association, cooperative lending agency, or other legally organized lending agency. The interest rate payable by a borrower on the portion of a guaranteed loan that is sold by a lender to the secondary market under this subtitle may be lower than the interest rate charged on the portion retained by the lender, but shall not exceed the average interest rate charged by the lender on loans made to farm borrowers. In the case of a loan guarantee on a loan made by a commercial or cooperative lender related to a loan made by the Secretary under section 3107— the Secretary shall not charge a fee to any person (including a lender); and a lender may charge a loan origination and servicing fee in an amount not to exceed 1 percent of the amount of the loan. Except as provided in subsections
(e)and (f), a loan guarantee under this subtitle shall be for not more than 90 percent of the principal and interest due on the loan. The Secretary shall guarantee 95 percent of— in the case of a loan that solely refinances a direct loan made under this subtitle, the principal and interest due on the loan on the date of the refinancing; or in the case of a loan that is used for multiple purposes, the portion of the loan that refinances the principal and interest due on a direct loan made under this subtitle that is outstanding on the date the loan is guaranteed. The Secretary may guarantee not more than 95 percent of— a farm ownership loan for acquiring a farm to a borrower who is participating in the downpayment loan program under section 3107; or an operating loan to a borrower who is participating in the downpayment loan program under section 3107 that is made during the period that the borrower has a direct loan outstanding under chapter 1 for acquiring a farm. The Secretary may guarantee under this subtitle a loan made under a State beginning farmer program, including a loan financed by the net proceeds of a qualified small issue agricultural bond for land or property described in section 144(a)(12)(B)(ii) of the Internal Revenue Code of 1986. If a partial liquidation of a delinquent loan is performed (with the prior consent of the Secretary) as part of loan servicing by a guaranteed lender under this subtitle, the Secretary shall not require full liquidation of the loan for the lender to be eligible to receive payment on losses. The Secretary shall approve or disapprove an application for a loan or loan guarantee made under this subtitle, and notify the applicant of such action, not later than 60 days after the date on which the Secretary has received a complete application for the loan or loan guarantee. The Secretary shall make available to any farmer, on request, a list of lenders in the area that participate in guaranteed farmer program loan programs established under this subtitle, and other lenders in the area that express a desire to participate in the programs and that request inclusion on the list. On the request of a borrower, the Secretary shall make available to the borrower— a copy of each document signed by the borrower; a copy of each appraisal performed with respect to the loan; and any document that the Secretary is required to provide to the borrower under any law in effect on the date of the request. Paragraph
(1)shall not supersede any duty imposed on the Secretary by a law in effect on January 5, 1988, unless the duty directly conflicts with a duty under paragraph (1). The Secretary shall provide notice by certified mail to each borrower who is at least 90 days past due on the payment of principal or interest on a loan made under this subtitle. The notice required under subsection
(a)shall— include a summary of all primary loan service programs, homestead retention programs, debt settlement programs, and appeal procedures, including the eligibility criteria, and terms and conditions of the programs and procedures; include a summary of the manner in which the borrower may apply, and be considered, for all such programs, except that the Secretary shall not require the borrower to select among the programs or waive any right to be considered for any program carried out by the Secretary; advise the borrower regarding all filing requirements and any deadlines that must be met for requesting loan servicing; provide any relevant forms, including applicable response forms; advise the borrower that a copy of regulations is available on request; and be designed to be readable and understandable by the borrower. All notices required by this section shall be contained in the regulations issued to carry out this subtitle. The notice described in subsection
(b)shall be provided— at the time an application is made for participation in a loan service program; on written request of the borrower; and before the earliest of the date of— initiating any liquidation; requesting the conveyance of security property; accelerating the loan; repossessing property; foreclosing on property; or taking any other collection action. The Secretary shall consider a farmer program loan borrower for all loan service programs if, not later than 60 days after receipt of the notice described in subsection (b), the borrower requests the consideration in writing. In considering a borrower for a loan service program, the Secretary shall place the highest priority on the preservation of the farming operations of the borrower. The Secretary shall ensure that appropriate procedures, including, to the extent practicable, onsite inspections, or use of county or State yield averages, are used in calculating future yields for an applicant for a loan, when an accurate projection cannot be made because the past production history of the farmer has been affected by a natural or major disaster or emergency. For the purpose of averaging the past yields of the farm of a farmer over a period of crop years to calculate the future yield of the farm under this subtitle, the Secretary shall permit the farmer to exclude the crop year with the lowest actual or county average yield for the farm from the calculation, if the farmer was affected by a natural or major disaster or emergency during at least 2 of the crop years during the period. A farmer was affected by a natural or major disaster or emergency under paragraph
(1)if the Secretary finds that the farming operations of the farmer have been substantially affected by a natural or major disaster or emergency, including a farmer who has a qualifying loss but is not located in a designated or declared disaster area. This subsection shall apply to any action taken by the Secretary that involves— a loan under chapter 1 or 2; and the yield of a farm of a farmer, including making a loan or loan guarantee, servicing a loan, or making a credit sale. In connection with a loan made or guaranteed under this subtitle, the Secretary shall require— the applicant— to certify in writing that, and the Secretary shall determine whether, the applicant is unable to obtain credit elsewhere; and to furnish an appropriate written financial statement; except for a guaranteed loan, an agreement by the borrower that if at any time it appears to the Secretary that the borrower may be able to obtain a loan from a production credit association, a Federal land bank, or other responsible cooperative or private credit source (or, in the case of a borrower under section 3106, the borrower may be able to obtain a loan under section 3101), at reasonable rates and terms for loans for similar purposes and periods of time, the borrower will, on request by the Secretary, apply for and accept the loan in a sufficient amount to repay the Secretary or the insured lender, or both, and to pay for any stock necessary to be purchased in a cooperative lending agency in connection with the loan; such provision for supervision of the operations of the borrower as the Secretary shall consider necessary to achieve the objectives of the loan and protect the interests of the United States; and the application of a person who is a veteran for a loan under chapter 1 or 2 to be given preference over a similar application from a person who is not a veteran if the applications are on file in a county or area office at the same time. If an application for a loan or loan guarantee under this subtitle (other than an operating loan or loan guarantee) is incomplete, the Secretary shall inform the applicant of the reasons the application is incomplete not later than 20 days after the date on which the Secretary has received the application. Not later than 10 calendar days after the Secretary receives an application for an operating loan or loan guarantee, the Secretary shall notify the applicant of any information required before a decision may be made on the application. If, not later than 20 calendar days after the date a request is made pursuant to clause
(i)with respect to an application, the Secretary has not received the information requested, the Secretary shall notify the applicant and the district office of the Farm Service Agency, in writing, of the outstanding information. On receipt of an application, the Secretary shall request from other parties such information as may be needed in connection with the application. Not later than 15 calendar days after the date on which an agency of the Department receives a request for information made pursuant to subparagraph (A), the agency shall provide the Secretary with the requested information. A county office shall notify the district office of the Farm Service Agency of each application for an operating loan or loan guarantee that is pending more than 45 days after receipt, and the reasons for which the application is pending. A district office that receives a notice provided under subparagraph
(A)with respect to an application shall immediately take steps to ensure that final action is taken on the application not later than 15 days after the date of the receipt of the notice. The district office shall report to the State office of the Farm Service Agency on each application for an operating loan or loan guarantee that is pending more than 45 days after receipt, and the reasons for which the application is pending. Each month, the Secretary shall notify the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate, on a State-by-State basis, as to each application for an operating loan or loan guarantee on which final action had not been taken within 60 calendar days after receipt by the Secretary, and the reasons for which final action had not been taken. If an application for a loan or loan guarantee under this subtitle is disapproved by the Secretary, the Secretary shall state the reasons for the disapproval in the notice required under paragraph (1). Notwithstanding paragraph (1), each application for a loan or loan guarantee under section 3601(e), or for a loan under section 3501(a) or 3502(a), that is to be disapproved by the Secretary solely because the Secretary lacks the funds necessary to make the loan or guarantee shall not be disapproved but shall be placed in pending status. The Secretary shall retain each pending application and reconsider the application beginning on the date that sufficient funds become available. Not later than 60 days after funds become available regarding each pending application, the Secretary shall notify the applicant of the approval or disapproval of funding for the application. If an application for a loan or loan guarantee under this subtitle is disapproved by the Secretary, but that action is subsequently reversed or revised as the result of an appeal within the Department or to the courts of the United States and the application is returned to the Secretary for further consideration, the Secretary shall act on the application and provide the applicant with notice of the action not later than 15 days after the date of return of the application to the Secretary. Except as provided in subparagraph (B), if an application for a guaranteed loan under this subtitle is approved by the Secretary, the Secretary shall provide the loan proceeds to the applicant not later than 15 days (or such longer period as the applicant may approve) after the application for the loan is approved by the Secretary. If the Secretary is unable to provide the loan proceeds to the applicant during the 15-day period described in subparagraph
(A)because sufficient funds are not available to the Secretary for that purpose, the Secretary shall provide the loan proceeds to the applicant as soon as practicable (but in no event later than 15 days unless the applicant agrees to a longer period) after sufficient funds for that purpose become available to the Secretary. The Secretary, or a contracting third party, shall annually review under section 3420 the loans of each seasoned direct loan borrower. If, based on the review, it is determined that a borrower would be able to obtain a loan, guaranteed by the Secretary, from a commercial or cooperative lender at reasonable rates and terms for loans for similar purposes and periods of time, the Secretary shall assist the borrower in applying for the commercial or cooperative loan. In accordance with section 3422, the Secretary shall prepare a prospectus on each seasoned direct loan borrower determined eligible to obtain a guaranteed loan. The prospectus shall contain a description of the amounts of the loan guarantee and interest assistance that the Secretary will provide to the seasoned direct loan borrower to enable the seasoned direct loan borrower to carry out a financially viable farming plan if a guaranteed loan is made. The Secretary shall provide a prospectus of a seasoned direct loan borrower to each approved lender whose lending area includes the location of the seasoned direct loan borrower. The Secretary shall notify each borrower of a loan that a prospectus has been provided to a lender under subparagraph (A). If the Secretary receives an offer from an approved lender to extend credit to the seasoned direct loan borrower under terms and conditions contained in the prospectus, the seasoned direct loan borrower shall not be eligible for a loan from the Secretary under chapter 1 or 2, except as otherwise provided in this section. If the Secretary is unable to provide loan guarantees and, if necessary, interest assistance to the seasoned direct loan borrower under this section in amounts sufficient to enable the seasoned direct loan borrower to borrow from commercial sources the amount required to carry out a financially viable farming plan, or if the Secretary does not receive an offer from an approved lender to extend credit to a seasoned direct loan borrower under the terms and conditions contained in the prospectus, the Secretary shall make a loan to the seasoned direct loan borrower under chapter 1 or 2, whichever is applicable. To the extent necessary for the borrower to obtain a loan, guaranteed by the Secretary, from a commercial or cooperative lender, the Secretary shall provide interest rate reductions as provided for under section 3413. In making an operating or ownership loan, the Secretary shall establish a plan and promulgate regulations (including performance criteria) that promote the goal of transitioning borrowers to private commercial credit and other sources of credit in the shortest period of time practicable. In carrying out this section, the Secretary shall integrate and coordinate the transition policy described in subsection
(a)with— the borrower training program established by section 3419; the loan assessment process established by section 3420; the supervised credit requirement established by section 3421; the market placement program established by section 3422; and other appropriate programs and authorities, as determined by the Secretary. The Secretary shall establish a plan, in coordination with activities under sections 3419 through 3422, to encourage each borrower with an outstanding loan under this chapter, or with respect to whom there is an outstanding guarantee under this chapter, to graduate to private commercial or other sources of credit. In carrying out this subtitle, the Secretary may— provide voluntary debt adjustment assistance between— farmers; and the creditors of the farmers; cooperate with State, territorial, and local agencies and committees engaged in the debt adjustment; and give credit counseling. Subject to this subsection and subsection (e)(1), the Secretary shall offer to sell real property that is acquired by the Secretary under this subtitle using the following order and method of sale: Not later than 15 days after acquiring real property, the Secretary shall publicly advertise the property for sale. Not later than 135 days after acquiring real property, the Secretary shall offer to sell the property to a qualified beginning farmer or a socially disadvantaged farmer at current market value based on a current appraisal. If more than 1 qualified beginning farmer or socially disadvantaged farmer offers to purchase the property, the Secretary shall select between the qualified applicants on a random basis. A random selection or denial by the Secretary of a qualified beginning farmer or a socially disadvantaged farmer for farm inventory property under this subparagraph shall be final and not administratively appealable. If no acceptable offer is received from a qualified beginning farmer or a socially disadvantaged farmer under subparagraph
(B)not later than 135 days after acquiring the real property, the Secretary shall, not later than 30 days after the 135-day period, sell the property after public notice at a public sale, and, if no acceptable bid is received, by negotiated sale, at the best price obtainable. Subject to subparagraph (B), any conveyance of real property under this subsection shall include all of the interest of the United States in the property, including mineral rights. The Secretary may for conservation purposes grant or sell an easement, restriction, development right, or similar legal right to real property to a State, a political subdivision of a State, or a private nonprofit organization separately from the underlying fee or other rights to the property owned by the United States. Subtitle I of title 40, United States Code, and title III of the Federal Property and Administrative Services Act of 1949 ( 41 U.S.C. 251 et seq. ) shall not apply to any exercise of authority under this subtitle. Subject to subparagraph (B), the Secretary may not lease any real property acquired under this subtitle. The Secretary may lease or contract to sell to a qualified beginning farmer or a socially disadvantaged farmer a farm acquired by the Secretary under this subtitle if the qualified beginning farmer qualifies for a credit sale or direct farm ownership loan under chapter 1 but credit sale authority for loans or direct farm ownership loan funds, respectively, are not available. The term of a lease or contract to sell to a qualified beginning farmer or a socially disadvantaged farmer under clause
(i)shall be until the earlier of— the date that is 18 months after the date of the lease or sale; or the date that direct farm ownership loan funds or credit sale authority for loans becomes available to the qualified beginning farmer or socially disadvantaged farmer. In determining the rental rate on real property leased under this subparagraph, the Secretary shall consider the income-producing capability of the property during the term that the property is leased. On the request of an applicant, not later than 30 days after denial of the application, the appropriate State director shall provide an expedited review and determination of whether the applicant is a qualified beginning farmer or a socially disadvantaged farmer for the purpose of acquiring farm inventory property. The determination of a State Director under subparagraph
(A)shall be final and not administratively appealable. The Secretary shall maintain statistical data on the number and results of determinations made under subparagraph
(A)and the effect of the determinations on— selling farm inventory property to qualified beginning farmers or socially disadvantaged farmers; and disposing of real property in inventory. The Secretary shall notify the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate if the Secretary determines that the review process under subparagraph
(A)is adversely affecting the selling of farm inventory property to qualified beginning farmers or socially disadvantaged farmers or the disposing of real property in inventory. In the case of any real property administered under this subtitle, the Secretary may grant or sell easements or rights-of-way for roads, utilities, and other appurtenances that are not inconsistent with the public interest. In this paragraph, the term Indian reservation means— all land located within the limits of any Indian reservation under the jurisdiction of the United States, notwithstanding the issuance of any patent, and, including any right-of-way running through the reservation; trust or restricted land located within the boundaries of a former reservation of an Indian tribe in the State of Oklahoma; or all Indian allotments the Indian titles to which have not been extinguished if the allotments are subject to the jurisdiction of an Indian tribe. Except as provided in paragraph (3), the Secretary shall dispose of or administer the property as provided in this paragraph when— the Secretary acquires property under this subtitle that is located within an Indian reservation; and the borrower-owner is the Indian tribe that has jurisdiction over the reservation in which the real property is located or the borrower-owner is a member of the Indian tribe; Not later than 90 days after acquiring the property, the Secretary shall afford an opportunity to purchase or lease the real property in accordance with the order of priority established under subparagraph
(D)to the Indian tribe having jurisdiction over the Indian reservation within which the real property is located or, if no order of priority is established by the Indian tribe under subparagraph (D), in the following order: An Indian member of the Indian tribe that has jurisdiction over the reservation within which the real property is located. An Indian corporate entity. The Indian tribe. The governing body of any Indian tribe having jurisdiction over an Indian reservation may revise the order of priority provided in subparagraph
(C)under which land located within the reservation shall be offered for purchase or lease by the Secretary under subparagraph
(C)and may restrict the eligibility for the purchase or lease to— persons who are members of the Indian tribe; Indian corporate entities that are authorized by the Indian tribe to lease or purchase land within the boundaries of the reservation; or the Indian tribe itself. If real property described in subparagraph
(B)is not purchased or leased under subparagraph
(C)and the Indian tribe having jurisdiction over the reservation within which the real property is located is unable to purchase or lease the real property, the Secretary shall transfer the real property to the Secretary of the Interior who shall administer the real property as if the real property were held in trust by the United States for the benefit of the Indian tribe. From the rental income derived from the lease of the transferred real property, and all other income generated from the transferred real property, the Secretary of the Interior shall pay the State, county, municipal, or other local taxes to which the transferred real property was subject at the time of acquisition by the Secretary, until the earlier of— the expiration of the 4-year period beginning on the date on which the real property is so transferred; or such time as the land is transferred into trust pursuant to subparagraph (H). If any real property is transferred to the Secretary of the Interior under subparagraph (E)— the Secretary of Agriculture shall have no further responsibility under this subtitle for— collection of any amounts with regard to the farm program loan that had been secured by the real property; any lien arising out of the loan transaction; or repayment of any amount with regard to the loan transaction or lien to the Treasury of the United States; and the Secretary of the Interior shall succeed to all right, title, and interest of the Secretary of Agriculture in the real estate arising from the farm program loan transaction, including the obligation to remit to the Treasury of the United States, in repayment of the original loan, the amounts provided in subparagraph (G). After the payment of any taxes that are required to be paid under subparagraph (E)(ii), all remaining rental income derived from the lease of the real property transferred to the Secretary of the Interior under subparagraph (E)(i), and all other income generated from the real property transferred to the Secretary of the Interior under that subparagraph, shall be deposited as miscellaneous receipts in the Treasury of the United States until the amount deposited is equal to the lesser of— the amount of the outstanding lien of the United States against the real property, as of the date the real property was acquired by the Secretary; the fair market value of the real property, as of the date of the transfer to the Secretary of the Interior; or the capitalized value of the real property, as of the date of the transfer to the Secretary of the Interior. If the total amount that is required to be deposited under subparagraph
(G)with respect to any real property has been deposited into the Treasury of the United States, title to the real property shall be held in trust by the United States for the benefit of the Indian tribe having jurisdiction over the Indian reservation within which the real property is located. Notwithstanding any other subparagraph of this paragraph, the Indian tribe having jurisdiction over the Indian reservation within which the real property described in subparagraph
(B)is located may, at any time after the real property has been transferred to the Secretary of the Interior under subparagraph (E), offer to pay the remaining amount on the lien or the fair market value of the real property, whichever is less. On payment of the amount, title to the real property shall be held by the United States in trust for the tribe and the trust or restricted land that has been acquired by the Secretary under foreclosure or voluntary transfer under a loan made or insured under this subtitle and transferred to an Indian person, entity, or tribe under this paragraph shall be considered to have never lost trust or restricted status. This paragraph shall apply to all land in the land inventory established under this subtitle (as of November 28, 1990) that was (immediately prior to the date) owned by an Indian borrower-owner described in subparagraph
(B)and that is situated within an Indian reservation, regardless of the date of foreclosure or acquisition by the Secretary. The Secretary shall afford an opportunity to an Indian person, entity, or tribe to purchase or lease the real property as provided in subparagraph (C). If the right is not exercised or no expression of intent to exercise the right is received within 180 days after November 28, 1990, the Secretary shall transfer the real property to the Secretary of the Interior as provided in subparagraph (E). The rights provided in this subsection shall be in addition to any right of first refusal under the law of the State in which the property is located. The Secretary shall dispose of or administer real property described in paragraph (1)(B) only as provided in paragraph (1), as modified by this paragraph, if— the real property described in paragraph (1)(B) is located within an Indian reservation; the borrower-owner is an Indian tribe that has jurisdiction over the reservation in which the real property is located or the borrower-owner is a member of an Indian tribe; the borrower-owner has obtained a loan made or guaranteed under this subtitle; and the borrower-owner and the Secretary have exhausted all of the procedures provided for in this subtitle to permit a borrower-owner to retain title to the real property, so that it is necessary for the borrower-owner to relinquish title. The Secretary shall provide the borrower-owner of real property that is described in subparagraph
(A)with written notice of— the right of the borrower-owner to voluntarily convey the real property to the Secretary; and the fact that real property so conveyed will be placed in the inventory of the Secretary. The Secretary shall provide the borrower-owner of the real property with written notice of the rights and protections provided under this subtitle to the borrower-owner, and the Indian tribe that has jurisdiction over the reservation in which the real property is located, from foreclosure or liquidation of the real property, including written notice— of paragraph (1), this paragraph, and subsection (e)(3); if the borrower-owner does not voluntarily convey the real property to the Secretary, that— the Secretary may foreclose on the property; in the event of foreclosure, the property will be offered for sale; the Secretary shall offer a bid for the property that is equal to the fair market value of the property or the outstanding principal and interest of the loan, whichever is higher; the property may be purchased by another party; and if the property is purchased by another party, the property will not be placed in the inventory of the Secretary and the borrower-owner will forfeit the rights and protections provided under this subtitle; and of the opportunity of the borrower-owner to consult with the Indian tribe that has jurisdiction over the reservation in which the real property is located or counsel to determine if State or tribal law provides rights and protections that are more beneficial than the rights and protections provided the borrower-owner under this subtitle. Except as provided in clause (ii), the Secretary shall accept the voluntary conveyance of real property described in subparagraph (A). If a hazardous substance (as defined in section 101(14) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601(14))) is located on the property and the Secretary takes remedial action to protect human health or the environment if the property is taken into inventory, the Secretary shall accept the voluntary conveyance of the property only if the Secretary determines that the conveyance is in the best interests of the Federal Government. If an Indian borrower-owner does not voluntarily convey to the Secretary real property described in subparagraph (A), not less than 30 days before a foreclosure sale of the property, the Secretary shall provide the Indian borrower-owner with the option of— requiring the Secretary to assign the loan and security instruments to the Secretary of the Interior, if the Secretary of the Interior agrees to an assignment releasing the Secretary of Agriculture from all further responsibility for collection of any amounts with regard to the loan secured by the real property; or requiring the Secretary to assign the loan and security instruments to the tribe having jurisdiction over the reservation in which the real property is located, if the tribe agrees to assume the loan under the terms specified in clause (iii). If an Indian borrower-owner does not voluntarily convey to the Secretary real property described in subparagraph (A), not less than 30 days before a foreclosure sale of the property, the Secretary shall provide written notice to the Indian tribe that has jurisdiction over the reservation in which the real property is located of— the sale; the fair market value of the property; and the requirements of this paragraph. If an Indian tribe assumes a loan under clause (i)— the Secretary shall not foreclose the loan because of any default that occurred prior to the date of the assumption; the loan shall be for the lesser of the outstanding principal and interest of the loan or the fair market value of the property; and the loan shall be treated as though the loan was made under Public Law 91–229 ( 25 U.S.C. 488 et seq. ). Except as provided in clause (ii), at a foreclosure sale of real property described in subparagraph (A), the Secretary shall offer a bid for the property that is equal to the higher of— the fair market value of the property; or the outstanding principal and interest on the loan. If a hazardous substance (as defined in section 101(14) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601(14))) is located on the property and the Secretary takes remedial action to protect human health or the environment if the property is taken into inventory, clause
(i)shall apply only if the Secretary determines that bidding is in the best interests of the Federal Government. The Secretary shall not offer for sale or sell any farmland referred to in paragraphs
(1)through
(3)if placing the farmland on the market will have a detrimental effect on the value of farmland in the area. The Secretary may sell farmland administered under this subtitle through an installment sale or similar device that contains such terms as the Secretary considers necessary to protect the investment of the Federal Government in the land. The Secretary may subsequently sell any contract entered into to carry out subparagraph (A). In the case of farmland administered under this subtitle that is highly erodible land (as defined in section 1201 of the Food Security Act of 1985 ( 16 U.S.C. 3801 )), the Secretary may require the use of specified conservation practices on the land as a condition of the sale or lease of the land. Notwithstanding any other law, compliance by the Secretary with this subsection shall not cause any acreage allotment, marketing quota, or acreage base assigned to the property to lapse, terminate, be reduced, or otherwise be adversely affected. If a conflict exists between any provision of this subsection and any provision of the law of any State providing a right of first refusal to the owner of farmland or the operator of a farm before the sale or lease of land to any other person, the provision of State law shall prevail. In this subsection: Except as provided in subparagraph (B), the term normal income security means all security not considered basic security, including crops, livestock, poultry products, Farm Service Agency payments and Commodity Credit Corporation payments, and other property covered by Farm Service Agency liens that is sold in conjunction with the operation of a farm or other business. The term normal income security does not include any equipment (including fixtures in States that have adopted the Uniform Commercial Code), or foundation herd or flock, that is— the basis of the farming or other operation; and the basic security for a farmer program loan. The Secretary shall release from the normal income security provided for a loan an amount sufficient to pay for the essential household and farm operating expenses of the borrower, until such time as the Secretary accelerates the loan. If a borrower is required to plan for or to report as to how proceeds from the sale of collateral property will be used, the Secretary shall notify the borrower of— the requirement; and the right to the release of funds under this subsection and the means by which a request for the funds may be made. Subject to paragraph (2), in the disposal of real property under this section, the Secretary shall establish perpetual wetland conservation easements to protect and restore wetland or converted wetland that exists on inventoried property. The Secretary shall not establish a wetland conservation easement on an inventoried property that— was cropland on the date the property entered the inventory of the Secretary; or was used for farming at any time during the period— beginning on the date that is 5 years before the property entered the inventory of the Secretary; and ending on the date on which the property entered the inventory of the Secretary. The Secretary shall provide prior written notification to a borrower considering homestead retention that a wetland conservation easement may be placed on land for which the borrower is negotiating a lease option. The appraised value of the farm shall reflect the value of the land due to the placement of wetland conservation easements. Subject to subsection (b), the Secretary may enter into a contract related to real property for conservation, recreation, or wildlife purposes. The Secretary may enter into a contract under subsection
(a)if— the property is wetland, upland, or highly erodible land; the property is determined by the Secretary to be suitable for the purpose involved; and the property secures a loan made under a law administered and held by the Secretary; and the contract would better enable a qualified borrower to repay the loan in a timely manner, as determined by the Secretary. The terms and conditions specified in a contract under subsection
(a)shall— specify the purposes for which the real property may be used; identify any conservation measure to be taken, and any recreational and wildlife use to be allowed, with respect to the real property; and require the owner to permit the Secretary, and any person or governmental entity designated by the Secretary, to have access to the real property for the purpose of monitoring compliance with the contract. Subject to this section, the Secretary may reduce or forgive the outstanding debt of a borrower— in the case of a borrower to whom the Secretary has made an outstanding loan under a law administered by the Secretary, by canceling that part of the aggregate amount of the outstanding loan that bears the same ratio to the aggregate amount as— the number of acres of the real property of the borrower that are subject to the contract; bears to the aggregate number of acres securing the loan; or in any other case, by treating as prepaid that part of the principal amount of a new loan to the borrower issued and held by the Secretary under a law administered by the Secretary that bears the same ratio to the principal amount as— the number of acres of the real property of the borrower that are subject to the contract; bears to the aggregate number of acres securing the new loan. The amount canceled or treated as prepaid under paragraph
(1)shall not exceed— in the case of a delinquent loan, the greater of— the value of the land on which the contract is entered into; or the difference between— the amount of the outstanding loan secured by the land; and the value of the land; or in the case of a nondelinquent loan, 33 percent of the amount of the loan secured by the land. If the Secretary uses the authority provided by this section, the Secretary shall consult with the Director of the Fish and Wildlife Service for the purposes of— selecting real property in which the Secretary may enter into a contract under this section; formulating the terms and conditions of the contract; and enforcing the contract. The Secretary, and any person or governmental entity (including an agency of the Federal Government) designated by the Secretary, may enforce a contract entered into by the Secretary under this section. The Secretary shall modify a delinquent farmer program loan made under this subtitle, or purchased from the lender or the Federal Deposit Insurance Corporation under section 3902, to the maximum extent practicable— to avoid a loss to the Secretary on the loan, with priority consideration being placed on writing-down the loan principal and interest (subject to subsections
(d)and (e)), and debt set-aside (subject to subsection (e)), to facilitate keeping the borrower on the farm, or otherwise through the use of primary loan service programs under this section; and to ensure that a borrower is able to continue farming operations. To be eligible to obtain assistance under subsection (a)— the delinquency shall be due to a circumstance beyond the control of the borrower, as defined in regulations issued by the Secretary, except that the regulations shall require that, if the value of the assets calculated under subsection (c)(2)(A)(ii) that may be realized through liquidation or other methods would produce enough income to make the delinquent loan current, the borrower shall not be eligible for assistance under subsection (a); the borrower shall have acted in good faith with the Secretary in connection with the loan as defined in regulations issued by the Secretary; the borrower shall present a preliminary plan to the Secretary that contains reasonable assumptions that demonstrate that the borrower will be able— to meet the necessary family living and farm operating expenses of the borrower; and to service all debts of the borrower, including restructured loans; and the loan, if restructured, shall result in a net recovery to the Federal Government, during the term of the loan as restructured, that would be more than or equal to the net recovery to the Federal Government from an involuntary liquidation or foreclosure on the property securing the loan. In determining the net recovery from the involuntary liquidation of a loan under this section, the Secretary shall calculate— the recovery value of the collateral securing the loan, in accordance with paragraph (2); and the value of the restructured loan, in accordance with paragraph (3). For the purpose of paragraph (1), the recovery value of the collateral securing the loan shall be based on the difference between— the amount of the current appraised value of the interests of the borrower in the property securing the loan; and the value of the interests of the borrower in all other assets that are— not essential for necessary family living expenses; not essential to the operation of the farm; and not exempt from judgment creditors or in a bankruptcy action under Federal or State law; the estimated administrative, attorney, and other expenses associated with the liquidation and disposition of the loan and collateral, including— the payment of prior liens; taxes and assessments, depreciation, management costs, the yearly percentage decrease or increase in the value of the property, and lost interest income, each calculated for the average holding period for the type of property involved; resale expenses, such as repairs, commissions, and advertising; and other administrative and attorney costs; and the value, as determined by the Secretary, of any property not included in subparagraph (A)(i) if the property is specified in any security agreement with respect to the loan and the Secretary determines that the value of the property should be included for purposes of this section. For the purpose of paragraph (1), the value of the restructured loan shall be based on the present value of payments that the borrower would make to the Federal Government if the terms of the loan were modified under any combination of primary loan service programs to ensure that the borrower is able to meet the obligations and continue farming operations. For the purpose of calculating the present value referred to in subparagraph (A), the Secretary shall use a discount rate of not more than the current rate at the time of the calculation of 90-day Treasury bills. For the purpose of assessing under subparagraph
(A)the ability of a borrower to meet debt obligations and continue farming operations, the Secretary shall assume that the borrower needs up to 110 percent of the amount indicated for payment of farm operating expenses, debt service obligations, and family living expenses. Not later than 90 days after receipt of a written request for restructuring from the borrower, the Secretary shall— make the calculations specified in paragraphs
(2)and (3); notify the borrower in writing of the results of the calculations; and provide documentation for the calculations. If the value of a restructured loan is greater than or equal to the recovery value of the collateral securing the loan, not later than 45 days after notifying the borrower under paragraph (4), the Secretary shall offer to restructure the loan obligations of the borrower under this subtitle through primary loan service programs that would enable the borrower to meet the obligations (as modified) under the loan and to continue the farming operations of the borrower. If the borrower accepts an offer under subparagraph (A), not later than 45 days after receipt of notice of acceptance, the Secretary shall restructure the loan accordingly. The obligations of a borrower to the Secretary under a loan shall terminate if— the borrower satisfies the requirements of paragraphs
(1)and
(2)of subsection (b); the value of the restructured loan is less than the recovery value; and not later than 90 days after receipt of the notification described in paragraph (4)(B), the borrower pays (or obtains third-party financing to pay) the Secretary an amount equal to the current market value. In making a determination concerning restructuring under this subsection, the Secretary, at the request of the borrower, shall enter into negotiations with the borrower concerning appraisals required under this subsection. If the borrower, based on a separate current appraisal, objects to the decision of the Secretary regarding an appraisal, the borrower and the Secretary shall mutually agree, to the extent practicable, on an independent appraiser who shall conduct another appraisal of the property of the borrower. The average of the 2 appraisals under clause
(i)that are closest in value shall become the final appraisal under this paragraph. The borrower and the Secretary shall each pay 1/2 of the cost of any independent appraisal. In selecting the restructuring alternatives to be used in the case of a borrower who has requested restructuring under this section, the Secretary shall give priority consideration to the use of a principal and interest write-down if other creditors of the borrower (other than any creditor who is fully collateralized) representing a substantial portion of the total debt of the borrower held by the creditors of the borrower, agree to participate in the development of the restructuring plan or agree to participate in a State mediation program. Failure of creditors to agree to participate in the restructuring plan or mediation program shall not preclude the use of a principal and interest write-down by the Secretary if the Secretary determines that restructuring results in the least cost to the Secretary. Before eliminating the option to use debt write-down in the case of a borrower, the Secretary shall make a reasonable effort to contact the creditors of the borrower, either directly or through the borrower, and encourage the creditors to participate with the Secretary in the development of a restructuring plan for the borrower. As a condition of restructuring a loan in accordance with this section, the borrower of the loan may be required to enter into a shared appreciation arrangement that requires the repayment of amounts written off or set aside. A shared appreciation agreement shall— have a term not to exceed 10 years; and provide for recapture based on the difference between the appraised values of the real security property at the time of restructuring and at the time of recapture. The amount of the appreciation to be recaptured by the Secretary shall be— 75 percent of the appreciation in the value of the real security property if the recapture occurs not later than 4 years after the date of restructuring; and 50 percent if the recapture occurs during the remainder of the term of the agreement. Recapture shall take place on the date that is the earliest of— the end of the term of the agreement; the conveyance of the real security property; the repayment of the loans; or the cessation of farming operations by the borrower. Transfer of title to the spouse of a borrower on the death of the borrower shall not be treated as a conveyance for the purpose of paragraph (4). Not later than 12 months before the end of the term of a shared appreciation arrangement, the Secretary shall notify the borrower involved of the provisions of the arrangement. The Secretary may amortize a recapture payment owed to the Secretary under this subsection. The term of an amortization under this paragraph may not exceed 25 years. The interest rate applicable to an amortization under this paragraph may not exceed the rate applicable to a loan to reacquire homestead property less 100 basis points. The Secretary may modify the amortization of a recapture payment referred to in subparagraph
(A)of this paragraph on which a payment has become delinquent if— the default is due to circumstances beyond the control of the borrower; and the borrower acted in good faith (as determined by the Secretary) in attempting to repay the recapture amount. The term of a reamortization under this subparagraph may not exceed 25 years from the date of the original amortization agreement. A reamortization of a recapture payment under this subparagraph may not provide for reducing the outstanding principal or unpaid interest due on the recapture payment. Any loan for farm ownership purposes, farm operating purposes, or disaster emergency purposes, that is deferred, consolidated, rescheduled, or reamortized shall, notwithstanding any other provision of this subtitle, bear interest on the balance of the original loan and for the term of the original loan at a rate that is the lowest of— the rate of interest on the original loan; the rate being charged by the Secretary for loans, other than guaranteed loans, of the same type at the time at which the borrower applies for a deferral, consolidation, rescheduling, or reamortization; or the rate being charged by the Secretary for loans, other than guaranteed loans, of the same type at the time of the deferral, consolidation, rescheduling, or reamortization. The Secretary may consolidate or reschedule outstanding loans for payment over a period not to exceed 7 years (or, in the case of loans for farm operating purposes, 15 years) from the date of the consolidation or rescheduling. The amount of unpaid principal and interest of the prior loans so consolidated or rescheduled shall not create a new charge against any loan levels authorized by law. No foreclosure or other similar action shall be taken to liquidate any loan determined to be ineligible for restructuring by the Secretary under this section— until the borrower has been given the opportunity to appeal the decision; and if the borrower appeals, the appeals process has been completed, and a determination has been made that the loan is ineligible for restructuring. A notice of ineligibility for restructuring shall be sent to the borrower by registered or certified mail not later than 15 days after a determination of ineligibility. The notice required under paragraph
(1)shall contain— the determination and the reasons for the determination; the computations used to make the determination, including the calculation of the recovery value of the collateral securing the loan; and a statement of the right of the borrower to appeal the decision to the appeals division, and to appear before a hearing officer. An appeal may include a request by the borrower for an independent appraisal of any property securing the loan. On a request under paragraph (1), the Secretary shall present the borrower with a list of 3 appraisers approved by the county supervisor, from which the borrower shall select an appraiser to conduct the appraisal. The cost of an appraisal under this subsection shall be paid by the borrower. The result of an appraisal under this subsection shall be considered in any final determination concerning the loan. A copy of any appraisal under this subsection shall be provided to the borrower. 6, 1988 The Secretary may provide for each borrower not more than 1 write-down or net recovery buy-out under this section with respect to all loans made to the borrower after January 6, 1988. For purposes of paragraph (1), the Secretary shall treat any loan made on or before January 6, 1988, with respect to which a restructuring, write-down, or net recovery buy-out is provided under this section after January 6, 1988, as a loan made after January 6, 1988. The Secretary may not use the authority provided by this section to reduce or terminate any portion of the debt of the borrower that the borrower could pay through the liquidation of assets (or through the payment of the loan value of the assets, if the loan value is greater than the liquidation value) described in subsection (c)(2)(A)(ii). The Secretary may provide each borrower not more than $300,000 in debt forgiveness under this section. In this section, the term mobilized military reservist means an individual who— is on active duty under section 688, 12301(a), 12301(g), 12302, 12304, 12306, or 12406, or chapter 15 of title 10, United States Code, or any other provision of law during a war or during a national emergency declared by the President or Congress, regardless of the location at which the active duty service is performed; or in the case of a member of the National Guard, is on full-time National Guard duty (as defined in section 101(d)(5) of title 10, United States Code) under a call to active service authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days under section 502(f) of title 32, United States Code, for purposes of responding to a national emergency declared by the President and supported by Federal funds. Any requirement that a borrower of a direct loan made under this subtitle make any interest payment on the loan that would otherwise be required to be made while the borrower is a mobilized military reservist is rescinded. The due date of any payment of principal on a direct loan made to a borrower under this subtitle that would otherwise be required to be made while or after the borrower is a mobilized military reservist is deferred for a period equal in length to the period for which the borrower is a mobilized military reservist. Interest on a direct loan made to a borrower described in this section shall not accrue during the period the borrower is a mobilized military reservist. Notwithstanding section 3425 or any other provision of this title, a borrower who receives assistance under this section shall not, as a result of the assistance, be considered to be delinquent or receiving debt forgiveness for purposes of receiving a direct or guaranteed loan under this subtitle. The Secretary shall establish and carry out in accordance with this section an interest rate reduction program for any loan guaranteed under this subtitle. The Secretary shall enter into a contract with, and make payments to, an institution to reduce, during the term of the contract, the interest rate paid by the borrower on the guaranteed loan if— the borrower— is unable to obtain credit elsewhere; is unable to make payments on the loan in a timely manner; and during the 24-month period beginning on the date on which the contract is entered into, has a total estimated cash income, including all farm and nonfarm income, that will equal or exceed the total estimated cash expenses, including all farm and nonfarm expenses, to be incurred by the borrower during the period; and during the term of the contract, the lender reduces the annual rate of interest payable on the loan by a minimum percentage specified in the contract. Subject to paragraph (2), in return for a contract entered into by a lender under subsection
(b)for the reduction of the interest rate paid on a loan, the Secretary shall make payments to the lender in an amount equal to not more than 100 percent of the cost of reducing the annual rate of interest payable on the loan. Payments under paragraph
(1)may not exceed the cost of reducing the rate by more than 400 basis points. The term of a contract entered into under this section to reduce the interest rate on a guaranteed loan may not exceed the outstanding term of the loan. Notwithstanding any other law, any contract of guarantee on a farm loan entered into under this subtitle shall contain a condition that the lender of the loan may not initiate a foreclosure action on the loan until 60 days after a determination is made with respect to the eligibility of the borrower to participate in the program established under this section. In this section: The term Administrator means the Administrator of the Small Business Administration. The term borrower-owner means— a borrower-owner of a loan made or guaranteed by the Secretary or the Administrator who meets the eligibility requirements of subsection (c)(1); or in a case in which an owner of homestead property pledged the property to secure the loan and the owner is different than the borrower, the owner. The term farm program loan means a loan made by the Administrator under the Small Business Act ( 15 U.S.C. 631 et seq. ) for any of the purposes authorized for loans under chapter 1 or 2. The term homestead property means— the principal residence and adjoining property possessed and occupied by a borrower-owner, including a reasonable number of farm outbuildings located on the adjoining land that are useful to any occupant of the homestead; and not more than 10 acres of adjoining land that is used to maintain the family of the borrower-owner. The Secretary or the Administrator shall, on application by a borrower-owner who meets the eligibility requirements of subsection (c)(1), permit the borrower-owner to retain possession and occupancy of homestead property under the terms set forth, and until the action described in this section has been completed, if— the Secretary forecloses or takes into inventory property securing a loan made under this subtitle; the Administrator forecloses or takes into inventory property securing a farm program loan made under the Small Business Act (15 U.S.C. 631 et seq.); or the borrower-owner of a loan made by the Secretary or the Administrator files a petition in bankruptcy that results in the conveyance of the homestead property to the Secretary or the Administrator, or agrees to voluntarily liquidate or convey the property in whole or in part. Subject to subsection (c), the Secretary or the Administrator shall not grant a period of occupancy of less than 3 nor more than 5 years. To be eligible to occupy homestead property, a borrower-owner of a loan made by the Secretary or the Administrator shall— apply for the occupancy not later than 30 days after the property is acquired by the Secretary or Administrator; have received from farming operations gross farm income that is reasonably commensurate with— the size and location of the farming unit of the borrower-owner; and local agricultural conditions (including natural and economic conditions), during at least 2 calendar years of the 6-year period preceding the calendar year in which the application is made; have received from farming operations at least 60 percent of the gross annual income of the borrower-owner and any spouse of the borrower-owner during at least 2 calendar years of the 6-year period described in subparagraph (B); have continuously occupied the homestead property during the 6-year period described in subparagraph (B), except that the requirement of this subparagraph may be waived if a borrower-owner, due to circumstances beyond the control of the borrower-owner, had to leave the homestead property for a period of time not to exceed 12 months during the 6-year period; during the period of occupancy of the homestead property, pay a reasonable sum as rent for the property to the Secretary or the Administrator in an amount substantially equivalent to rents charged for similar residential properties in the area in which the homestead property is located; during the period of the occupancy of the homestead property, maintain the property in good condition; and meet such other reasonable and necessary terms and conditions as the Secretary may require. In subparagraphs
(B)and
(C)of paragraph (1), the term farming operations includes rent paid by a lessee of agricultural land during a period in which the borrower-owner, due to circumstances beyond the control of the borrower-owner, is unable to actively farm the land. For purposes of paragraph (1)(E), the failure of the borrower-owner to make a timely rental payment shall constitute cause for the termination of all rights of the borrower-owner to possession and occupancy of the homestead property under this section. In effecting a termination under subparagraph (A), the Secretary shall— afford the borrower-owner or lessee the notice and hearing procedural rights described in subtitle H of the Department of Agriculture Reorganization Act of 1994 ( 7 U.S.C. 6991 et seq. ); and comply with any applicable State and local law governing eviction of a person from residential property. Subject to subsection (b)(2), the period of occupancy allowed the borrower-owner of homestead property under this section shall be the period requested in writing by the borrower-owner. During the period the borrower-owner occupies the homestead property, the borrower-owner shall have a right to reacquire the homestead property on such terms and conditions as the Secretary shall determine. During the period of occupancy of a borrower-owner who is a socially disadvantaged farmer, the borrower-owner or a member of the immediate family of the borrower-owner shall have a right of first refusal to reacquire the homestead property on such terms and conditions as the Secretary shall determine. The Secretary may not demand a payment for the homestead property that is in excess of the current market value of the homestead property as established by an independent appraisal. An independent appraisal under clause
(iii)shall be conducted by an appraiser selected by the borrower-owner, or, in the case of a borrower-owner who is a socially disadvantaged farmer, the immediate family member of the borrower-owner, from a list of 3 appraisers approved by the county supervisor. Except as provided in subparagraph (B), no right of a borrower-owner under this section, and no agreement entered into between the borrower-owner and the Secretary for occupancy of the homestead property, shall be transferable or assignable by the borrower-owner or by operation of law. In the case of death or incompetency of the borrower-owner, the right and agreement shall be transferable to a spouse of the borrower-owner if the spouse agrees to comply with any terms and conditions of the right or agreement. Not later than the date of acquisition of the property securing a loan made under this subtitle, the Secretary shall notify the borrower-owner of the property of the availability of homestead protection rights under this section. At the end of the period of occupancy allowed a borrower-owner under subsection (c), the Secretary or the Administrator shall grant to the borrower-owner a right of first refusal to reacquire the homestead property on such terms and conditions (which may include payment of principal in installments) as the Secretary or the Administrator shall determine. The terms and conditions granted under paragraph
(1)may not be less favorable than those offered by the Secretary or Administrator or intended by the Secretary or Administrator to be offered to any other buyer. At the time a reacquisition agreement is entered into, the Secretary or the Administrator may not demand a total payment of principal that is in excess of the value of the homestead property. To the maximum extent practicable, the value of the homestead property shall be determined by an independent appraisal made during the 180-day period beginning on the date of receipt of the application of the borrower-owner to retain possession and occupancy of the homestead property. The Secretary may enter into a contract authorized by this section before the Secretary acquires title to the homestead property that is the subject of the contract. In the event of a conflict between this section and a provision of State law relating to the right of a borrower-owner to designate for separate sale or redeem part or all of the real property securing a loan foreclosed on by a lender to the borrower-owner, the provision of State law shall prevail. Subject to subsection (b), the Secretary may transfer to a Federal or State agency, for conservation purposes, any real property, or interest in real property, administered by the Secretary under this subtitle— with respect to which the rights of all prior owners and operators have expired; that is eligible to be disposed of in accordance with section 3409; and that— has marginal value for agricultural production; is environmentally sensitive; or has special management importance. The Secretary may not transfer any property or interest in property under subsection
(a)unless— at least 2 public notices are given of the transfer; if requested, at least 1 public meeting is held prior to the transfer; and the Governor and at least 1 elected county official of the State and county in which the property is located are consulted prior to the transfer. The Secretary shall establish annual target participation rates, on a county-wide basis, that shall ensure that members of socially disadvantaged groups shall— receive loans made or guaranteed under chapter 1; and have the opportunity to purchase or lease farmland acquired by the Secretary under this subtitle. Except as provided in paragraph (3), in establishing the target rates, the Secretary shall take into consideration— the portion of the population of the county made up of the socially disadvantaged groups; and the availability of inventory farmland in the county. In the case of gender, target participation rates shall take into consideration the number of current and potential socially disadvantaged farmers in a State in proportion to the total number of farmers in the State. To the maximum extent practicable, the Secretary shall reserve sufficient loan funds made available under chapter 1 for use by members of socially disadvantaged groups identified under target participation rates established under subsection (a). The Secretary shall allocate the loans on the basis of the proportion of members of socially disadvantaged groups in a county and the availability of inventory farmland, with the greatest amount of loan funds being distributed in the county with the greatest proportion of socially disadvantaged group members and the greatest quantity of available inventory farmland. In distributing loan funds in counties within the boundaries of an Indian reservation, the Secretary shall allocate the funds on a reservation-wide basis. The Secretary shall establish annual target participation rates that shall ensure that socially disadvantaged farmers receive loans made or guaranteed under chapter 2. In establishing the target rates, the Secretary shall consider the number of socially disadvantaged farmers in a State in proportion to the total number of farmers in the State. To the maximum extent practicable, the Secretary shall reserve and allocate the proportion of the loan funds of each State made available under chapter 2 that is equal to the target participation rate of the State for use by the socially disadvantaged farmers in the State. To the maximum extent practicable, the Secretary shall distribute the total loan funds reserved under subparagraph
(A)on a county-by-county basis according to the number of socially disadvantaged farmers in the county. Any funds reserved and allocated under this paragraph but not used within a State shall, to the extent necessary to satisfy pending applications under this subtitle, be available for use by socially disadvantaged farmers in other States, as determined by the Secretary, and any remaining funds shall be reallocated within the State. The Secretary shall prepare and submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes the annual target participation rates and the success in meeting the rates. Not later than 180 days after April 4, 1996, the Secretary shall ensure that the implementation of this section is consistent with the holding of the Supreme Court in Adarand Constructors, Inc. v. Federico Pena, Secretary of Transportation, 115 S. Ct. 2097 (1995). If the lender of a guaranteed farmer program loan takes any action described in section 3903(a)(4) with respect to the loan and the Secretary approves the action, for purposes of the guarantee, the lender shall be treated as having sustained a loss equal to the amount by which— the outstanding balance of the loan immediately before the action; exceeds the outstanding balance of the loan immediately after the action. The Secretary shall approve the taking of an action described in section 3903(a)(4) by the lender of a guaranteed farmer program loan with respect to the loan if the action reduces the net present value of the loan to an amount equal to not less than the greater of— the greatest net present value of a loan the borrower could reasonably be expected to repay; and the difference between— the greatest amount that the lender of the loan could reasonably expect to recover from the borrower through bankruptcy, or liquidation of the property securing the loan; and all reasonable and necessary costs and expenses that the lender of the loan could reasonably expect to incur to preserve or dispose of the property (including all associated legal and property management costs) in the course of such a bankruptcy or liquidation. This section shall not limit the authority of the Secretary to enter into a shared appreciation arrangement with a borrower under section 3411(e). The Secretary may not make or guarantee any farmer program loan to a farm borrower on the condition that the borrower waive any right under the mediation program of any State. The Secretary shall contract to provide educational training to all borrowers of direct loans made under this subtitle in financial and farm management concepts associated with commercial farming. The Secretary may contract with a State or private provider of farm management and credit counseling services (including a community college, the extension service of a State, a State department of agriculture, or a nonprofit organization) to carry out this section. The Secretary may consult with the chief executive officer of a State concerning the identity of the contracting organization and the process for contracting. Subject to paragraph (2), to be eligible to obtain a direct loan under this subtitle, a borrower shall be required to obtain management assistance under this section, appropriate to the management ability of the borrower during the determination of eligibility for the loan. The need of a borrower who satisfies the criteria set out in section 3101(b)(1)(B) or 3201(b)(1)(B) for management assistance under this section shall not be cause for denial of eligibility of the borrower for a direct loan under this subtitle. The Secretary shall issue regulations establishing guidelines and curriculum for the borrower training program established under this section. A borrower— shall pay for training received under this section; and may use funds from operating loans made under chapter 2 to pay for the training. The Secretary may waive the requirements of this section for an individual borrower on a determination that the borrower demonstrates adequate knowledge in areas described in this section. The Secretary shall establish criteria providing for the application of paragraph
(1)consistently in all counties nationwide. After an applicant is determined to be eligible for assistance under this subtitle, the Secretary shall evaluate, in accordance with regulations issued by the Secretary, the farming plan and financial situation of each qualified farmer applicant. In evaluating the farming plan and financial situation of an applicant under this section, the Secretary shall determine— the amount that the applicant needs to borrow to carry out the proposed farming plan; the rate of interest that the applicant would need to be able to cover expenses and build an adequate equity base; the goals of the proposed farming plan of the applicant; the financial viability of the plan and any changes that are necessary to make the plan viable; and whether assistance is necessary under this subtitle and, if so, the amount of the assistance. The Secretary may contract with a third party (including an entity that is eligible to provide borrower training under section 3419(b)) to conduct a loan assessment under this section. Loan assessments conducted under this section shall include annual review of direct loans, and periodic review (as determined necessary by the Secretary) of guaranteed loans, made under this subtitle to assess the progress of a borrower in meeting the goals for the farm operation. The Secretary may contract with an entity that is eligible to provide borrower training under section 3419(b) to conduct a loan review under paragraph (1). If a borrower is delinquent in payments on a direct or guaranteed loan made under this subtitle, the Secretary or the contracting entity shall determine the cause of, and action necessary to correct, the delinquency. The Secretary shall issue regulations providing guidelines for loan assessments conducted under this section. The Secretary shall provide adequate training to employees of the Farm Service Agency on credit analysis and financial and farm management— to better acquaint the employees with what constitutes adequate financial data on which to base a direct or guaranteed loan approval decision; and to ensure proper supervision of farmer program loans. The Secretary shall establish a market placement program for a qualified beginning farmer and any other borrower of farmer program loans that the Secretary believes has a reasonable chance of qualifying for commercial credit with a guarantee provided under this subtitle. The Secretary shall classify, by gender, records of applicants for loans and loan guarantees under this subtitle. As a condition of obtaining any benefit (including a direct loan, loan guarantee, or payment) described in subsection (b), a borrower shall be required to obtain at least catastrophic risk protection insurance coverage under section 508 of the Federal Crop Insurance Act ( 7 U.S.C. 1508 ) for the crop and crop year for which the benefit is sought, if the coverage is offered by the Federal Crop Insurance Corporation. Subsection
(a)shall apply to— a farm ownership loan under section 3102; an operating loan under section 3202; and an emergency loan under section 3301. The Secretary may not make a direct operating loan under chapter 2 to a borrower who is delinquent on any loan made or guaranteed under this subtitle. Except as provided in paragraph (2)— the Secretary may not make a loan under this subtitle to a borrower that has received debt forgiveness on a loan made or guaranteed under this subtitle; and the Secretary may not guarantee a loan under this subtitle to a borrower that has received— debt forgiveness after April 4, 1996, on a loan made or guaranteed under this subtitle; or received debt forgiveness on more than 3 occasions on or before April 4, 1996. The Secretary may make a direct or guaranteed farm operating loan for paying annual farm operating expenses of a borrower who— was restructured with a write-down under section 3411; is current on payments under a confirmed reorganization plan under chapters 11, 12, or 13 of title 11 of the United States Code; or received debt forgiveness on not more than 1 occasion resulting directly and primarily from a major disaster or emergency designated by the President on or after April 4, 1996, under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.). The Secretary may make an emergency loan under section 3301 to a borrower that— on or before April 4, 1996, received not more than 1 debt forgiveness on a loan made or guaranteed under this subtitle; and after April 4, 1996, has not received debt forgiveness on a loan made or guaranteed under this subtitle. The Secretary may not provide to a borrower debt forgiveness on a direct loan made under this subtitle if the borrower has received debt forgiveness on another direct loan made under this subtitle. The Secretary shall develop and use a consolidated short form for farmer program loan borrowers to use in certifying compliance with any applicable provision of law (including a regulation) that serves as an eligibility prerequisite for a loan made under this subtitle. In the administration of this subtitle, the Secretary shall, to the extent practicable, use underwriting forms, standards, practices, and terminology similar to the forms, standards, practices, and terminology used by lenders in the private sector. In this section: The term demonstration program means a demonstration program carried out by a qualified entity under the pilot program established in subsection (b)(1). The term eligible participant means a qualified beginning farmer that— lacks significant financial resources or assets; and has an income that is less than— 80 percent of the median income of the State in which the farmer resides; or 200 percent of the most recent annual Federal Poverty Income Guidelines published by the Department of Health and Human Services for the State. The term individual development account means a savings account described in subsection (b)(4)(A). The term qualified entity means— 1 or more organizations— described in section 501(c)(3) of the Internal Revenue Code of 1986; and exempt from taxation under section 501(a) of such Code; or a State, local, or tribal government submitting an application jointly with an organization described in clause (i). An organization described in subparagraph (A)(i) may collaborate with a financial institution or for-profit community development corporation to carry out the purposes of this section. The Secretary shall establish a pilot program to be known as the New Farmer Individual Development Accounts Pilot Program under which the Secretary shall work through qualified entities to establish demonstration programs— of at least 5 years in duration; and in at least 15 States. The Secretary shall operate the pilot program through and in coordination with the farmer program loans of the Farm Service Agency. A qualified entity carrying out a demonstration program under this section shall establish a reserve fund consisting of a non-Federal match of 50 percent of the total amount of the grant awarded to the demonstration program under this section. After the qualified entity has deposited the non-Federal matching funds described in subparagraph
(A)in the reserve fund, the Secretary shall provide the total amount of the grant awarded under this section to the demonstration program for deposit in the reserve fund. Of the funds deposited under subparagraph
(B)in the reserve fund established for a demonstration program, the qualified entity carrying out the demonstration program— may use up to 10 percent for administrative expenses; and shall use the remainder in making matching awards described in paragraph (4)(B)(ii)(I). Any interest earned on amounts in a reserve fund established under subparagraph
(A)may be used by the qualified entity as additional matching funds for, or to administer, the demonstration program. The Secretary shall issue guidance regarding the investment requirements of reserve funds established under this paragraph. On the date on which all funds remaining in any individual development account established by a qualified entity have reverted under paragraph (5)(B)(ii) to the reserve fund established by the qualified entity, there shall revert to the Treasury of the United States a percentage of the amount (if any) in the reserve fund equal to— the amount of Federal funds deposited in the reserve fund under subparagraph
(B)that were not used for administrative expenses; divided by the total amount of funds deposited in the reserve fund. A qualified entity receiving a grant under this section shall establish and administer individual development accounts for eligible participants. To be eligible to receive funds under this section from a qualified entity, an eligible participant shall enter into a contract with only 1 qualified entity under which— the eligible participant agrees— to deposit a certain amount of funds of the eligible participant in a personal savings account, as prescribed by the contractual agreement between the eligible participant and the qualified entity; to use the funds described in subclause
(I)only for 1 or more eligible expenditures described in paragraph (5)(A); and to complete financial training; and the qualified entity agrees— to deposit, not later than 1 month after an amount is deposited pursuant to clause (i)(I), at least a 100-percent, and up to a 200-percent, match of that amount into the individual development account established for the eligible participant; and with uses of funds proposed by the eligible participant. A qualified entity administering a demonstration program under this section may provide not more than $6,000 for each fiscal year in matching funds to the individual development account established by the qualified entity for an eligible participant. An amount provided under clause
(i)shall not be considered to be a gift or loan for mortgage purposes. An eligible expenditure described in this subparagraph is an expenditure— to purchase farmland or make a down payment on an accepted purchase offer for farmland; to make mortgage payments on farmland purchased pursuant to clause (i), for up to 180 days after the date of the purchase; to purchase breeding stock, fruit or nut trees, or trees to harvest for timber; and for other similar expenditures, as determined by the Secretary. An eligible participant may make an eligible expenditure at any time during the 2-year period beginning on the date on which the last matching funds are provided under paragraph (4)(B)(ii)(I) to the individual development account established for the eligible participant. At the end of the period described in clause (i), any funds remaining in an individual development account established for an eligible participant shall revert to the reserve fund of the demonstration program under which the account was established. A qualified entity that seeks to carry out a demonstration program under this section may submit to the Secretary an application at such time, in such form, and containing such information as the Secretary may prescribe. In considering whether to approve an application to carry out a demonstration program under this section, the Secretary shall assess— the degree to which the demonstration program described in the application is likely to aid eligible participants in successfully pursuing new farming opportunities; the experience and ability of the qualified entity to responsibly administer the demonstration program; the experience and ability of the qualified entity in recruiting, educating, and assisting eligible participants to increase economic independence and pursue or advance farming opportunities; the aggregate amount of direct funds from non-Federal public sector and private sources that are formally committed to the demonstration program as matching contributions; the adequacy of the plan of the qualified entity to provide information relevant to an evaluation of the demonstration program; and such other factors as the Secretary considers to be appropriate. In considering an application to conduct a demonstration program under this section, the Secretary shall give preference to an application from a qualified entity that demonstrates— a track record of serving clients targeted by the program, including, as appropriate, socially disadvantaged farmers; and expertise in dealing with financial management aspects of farming. Not later than 1 year after the date of enactment of this section, in accordance with this section, the Secretary shall, on a competitive basis, approve such applications to conduct demonstration programs as the Secretary considers appropriate. If the Secretary approves an application to carry out a demonstration program, the Secretary shall authorize the applicant to carry out the project for a period of 5 years, plus an additional 2 years to make eligible expenditures in accordance with subsection (b)(5)(B). The Secretary shall make a grant to a qualified entity authorized to carry out a demonstration program under this section. The aggregate amount of grant funds provided to a demonstration program carried out under this section shall not exceed $250,000. The Secretary shall pay the amounts awarded under a grant made under this section— on the awarding of the grant; or pursuant to such payment plan as the qualified entity may specify. Not later than 60 days after the end of the calendar year in which the Secretary authorizes a qualified entity to carry out a demonstration program under this section, and annually thereafter until the conclusion of the demonstration program, the qualified entity shall prepare an annual report that includes, for the period covered by the report— an evaluation of the progress of the demonstration program; information about the demonstration program, including the eligible participants and the individual development accounts that have been established; and such other information as the Secretary may require. A qualified entity shall submit each report required under subparagraph
(A)to the Secretary. Not later than 1 year after the date on which all demonstration programs under this section are concluded, the Secretary shall submit to Congress a final report that describes the results and findings of all reports and evaluations carried out under this section. The Secretary may conduct an annual review of the financial records of a qualified entity— to assess the financial soundness of the qualified entity; and to determine the use of grant funds made available to the qualified entity under this section. In carrying out this section, the Secretary may promulgate regulations to ensure that the program includes provisions for— the termination of demonstration programs; control of the reserve funds in the case of such a termination; transfer of demonstration programs to other qualified entities; and remissions from a reserve fund to the Secretary in a case in which a demonstration program is terminated without transfer to a new qualified entity. There is authorized to be appropriated to carry out this section $5,000,000 for each of fiscal years 2013 through 2018. The Secretary may conduct pilot projects of limited scope and duration that are consistent with this subtitle to evaluate processes and techniques that may improve the efficiency and effectiveness of the programs carried out under this subtitle The Secretary shall— not less than 60 days before the date on which the Secretary initiates a pilot project under subsection (a), submit notice of the proposed pilot project to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate; and consider any recommendations or feedback provided to the Secretary in response to the notice provided under paragraph (1). Except as provided in subsections
(b)and (c), the Secretary may not approve a loan under this subtitle to drain, dredge, fill, level, or otherwise manipulate a wetland (as defined in section 1201(a) of the Food Security Act of 1985 ( 16 U.S.C. 3801(a) )), or to engage in any activity that results in impairing or reducing the flow, circulation, or reach of water. Subsection
(a)does not apply in the case of— an activity related to the maintenance of a previously converted wetland; or an activity that had already commenced before November 28, 1990. This section shall not apply to a loan made or guaranteed under this subtitle for a utility line. The Secretary may make or guarantee loans under chapters 1 and 2 from the Agricultural Credit Insurance Fund for not more than $4,226,000,000 for each of fiscal years 2013 through 2018, of which, for each fiscal year— $1,200,000,000 shall be for direct loans, of which— $350,000,000 shall be for farm ownership loans; and $850,000,000 shall be for operating loans; and $3,026,000,000 shall be for guaranteed loans, of which— $1,000,000,000 shall be for guarantees of farm ownership loans; and $2,026,000,000 shall be for guarantees of operating loans. Of the amounts made available under paragraph
(1)for direct farm ownership loans, the Secretary shall reserve an amount that is not less than 75 percent of the total amount for qualified beginning farmers. Of the amounts reserved for a fiscal year under subclause (I), the Secretary shall reserve an amount not less than 2/3 of the amount for the down payment loan program under section 3107 and joint financing arrangements under section 3105 until April 1 of the fiscal year. Of the amounts made available under paragraph
(1)for direct operating loans, the Secretary shall reserve for qualified beginning farmers for each of fiscal years 2013 through 2018, an amount that is not less than 50 percent of the total amount. Except as provided in clause (i)(II), funds reserved for qualified beginning farmers under this subparagraph for a fiscal year shall be reserved only until September 1 of the fiscal year. Of the amounts made available under paragraph
(1)for guarantees of farm ownership loans, the Secretary shall reserve an amount that is not less than 40 percent of the total amount for qualified beginning farmers. Of the amounts made available under paragraph
(1)for guarantees of operating loans, the Secretary shall reserve 40 percent for qualified beginning farmers. Funds reserved for qualified beginning farmers under this subparagraph for a fiscal year shall be reserved only until April 1 of the fiscal year. If a qualified beginning farmer meets the eligibility criteria for receiving a direct or guaranteed loan under section 3101, 3107, or 3201, the Secretary shall make or guarantee the loan if sufficient funds reserved under this paragraph are available to make or guarantee the loan. Subject to subparagraph (B)— beginning on August 1 of each fiscal year, the Secretary shall use available unsubsidized guaranteed farm operating loan funds to provide direct farm ownership loans approved by the Secretary to qualified beginning farmers under the down payment loan program established under section 3107, if sufficient direct farm ownership loan funds are not otherwise available; and beginning on September 1 of each fiscal year, the Secretary shall use available unsubsidized guaranteed farm operating loan funds to provide direct farm ownership loans approved by the Secretary to qualified beginning farmers, if sufficient direct farm ownership loan funds are not otherwise available. The Secretary shall limit the transfer of funds under subparagraph
(A)so that all guaranteed farm operating loans that have been approved, or will be approved, by the Secretary during the fiscal year will be made to the extent of available amounts. Subject to subparagraphs
(B)and (C), beginning on September 1 of each fiscal year, the Secretary may use available funds made available under chapter 3 for the fiscal year to fund the credit sale of farm real estate in the inventory of the Secretary. The transfer authority provided under subparagraph
(A)shall not apply to any funds made available to the Secretary for any fiscal year under an Act making supplemental appropriations. The Secretary shall limit the transfer of funds under subparagraph
(A)so that all emergency disaster loans that have been approved, or will be approved, by the Secretary during the fiscal year will be made to the extent of available amounts. Funds made available to carry out this subtitle shall remain available until expended. The Secretary shall develop long-term cost projections for loan program authorizations required under subsection (a). Each projection under paragraph
(1)shall include analyses of— the long-term costs of the lending levels that the Secretary requests to be authorized under subsection (a); and the long-term costs for increases in lending levels beyond those requested to be authorized, based on increments of $10,000,000 or such other levels as the Secretary considers appropriate. The Secretary shall submit to the Committees on Agriculture and Appropriations of the House of Representatives and the Committees on Agriculture, Nutrition, and Forestry and Appropriations of the Senate reports containing the long-term cost projections for the 3-year period beginning with fiscal year 1983 and each 3-year period thereafter at the time the requests for authorizations for those periods are submitted to Congress. Notwithstanding any other provision of law, not less than 25 percent of the loans for farm ownership purposes for each fiscal year under this subtitle shall be for low-income, limited-resource borrowers. The Secretary shall provide notification to farm borrowers under this subtitle in the normal course of loan making and loan servicing operations, of the provisions of this subtitle relating to low-income, limited-resource borrowers and the procedures by which persons may apply for loans under the low-income, limited-resource borrower program. .
Connectionstraces to 14
3 references not yet in our index
  • 60 Stat. 1075
  • 41 USC 251
  • Pub. L. 91-229
Citation graph
cites case law
Sec. 5001
Farmer loans, servicing, and other assistance under the Consolidated Farm and Rural Development Act
U.S.C.§ 3812
U.S.C.§ 655
U.S.C.§ 667
U.S.C.§ 1632a
U.S.C.§ 5121
U.S.C.§ 7701
U.S.C.§ 8301
U.S.C.§ 2266
U.S.C.§ 9601
Stat.60 Stat. 1075
Cite41 USC 251
Pub. L.Pub. L. 91-229
Cites 17 · showing 12Cited by 0 across 0 sources
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