Sec. 303. PURPOSES OF LOANS
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## SEC. 303 PURPOSES OF LOANS **[**[7 U.S.C. 1923](/us/usc/t7/s1923)**]** ###
(a)Allowed Purposes ####
(1)Direct loans A farmer or rancher may use a direct loan made under this subtitle only for— #####
(A)acquiring or enlarging a farm or ranch; #####
(B)making capital improvements to a farm or ranch; #####
(C)paying loan closing costs related to acquiring, enlarging, or improving a farm or ranch; #####
(D)paying for activities to promote soil and water conservation and protection described in section 304 on a farm or ranch; or #####
(E)refinancing a temporary bridge loan made by a commercial or cooperative lender to a farmer or rancher for the acquisition of land for a farm or ranch, if— ######
(i)the Secretary approved an application for a direct farm ownership loan to the farmer or rancher for acquisition of the land; and ######
(ii)funds for direct farm ownership loans under section 346(b) were not available at the time at which the application was approved. ####
(2)Guaranteed loans A farmer or rancher may use a loan guaranteed under this subtitle only for— #####
(A)acquiring or enlarging a farm or ranch; #####
(B)making capital improvements to a farm or ranch; #####
(C)paying loan closing costs related to acquiring, enlarging, or improving a farm or ranch; #####
(D)paying for activities to promote soil and water conservation and protection described in section 304 on a farm or ranch; or #####
(E)refinancing indebtedness. ###
(b)Preferences In making or guaranteeing a loan under this subtitle for purchase of a farm or ranch, the Secretary shall give preference to a person who— ####
(1)has a dependent family; ####
(2)to the extent practicable, is able to make an initial down payment on the farm or ranch; or ####
(3)is an owner of livestock or farm or ranch equipment that is necessary to successfully carry out farming or ranching operations. ###
(c)Hazard Insurance Requirement ####
(1)In general After the Secretary makes the determination required by paragraph (2), the Secretary may not make a loan to a farmer or rancher under this subtitle unless the farmer or rancher has, or agrees to obtain, hazard insurance on any real property to be acquired or improved with the loan. ####
(2)Determination Not later than 180 days after the date of enactment of this subsection, the Secretary shall determine the appropriate level of insurance to be required under paragraph (1).
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Sec. 303
PURPOSES OF LOANS
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