Sec. 312. PURPOSES OF LOANS
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## SEC. 312 PURPOSES OF LOANS **[**[7 U.S.C. 1942](/us/usc/t7/s1942)**]** ###
(a)In General A direct loan (including a microloan, as defined by the Secretary) may be made under this subtitle only for— ####
(1)paying the costs incident to reorganizing a farm or ranch for more profitable operation; ####
(2)purchasing livestock, poultry, or farm or ranch equipment; ####
(3)purchasing feed, seed, fertilizer, insecticide, or farm or ranch supplies, or to meet other essential farm or ranch operating expenses, including cash rent; ####
(4)financing land or water development, use, or conservation; ####
(5)paying loan closing costs; ####
(6)assisting a farmer or rancher in changing the equipment, facilities, or methods of operation of a farm or ranch 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 the Act (29 U.S.C. 667), if the Secretary determines that without assistance under this paragraph the farmer or rancher is likely to suffer substantial economic injury in complying with the standard; ####
(7)training a limited-resource borrower receiving a loan under section 310D in maintaining records of farming and ranching operations; ####
(8)training a borrower under section 359; ####
(9)refinancing the indebtedness of a borrower, if the borrower— #####
(A)has refinanced a loan under this subtitle not more than 4 times previously; and #####
(B)######
(i)is a direct loan borrower under this title at the time of the refinancing and has suffered a qualifying loss because of a natural disaster declared by the Secretary under this title or a 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 ######
(ii)is refinancing a debt obtained from a creditor other than the Secretary; or ####
(10)providing other farm, ranch, or home needs, including family subsistence. ###
(b)Guaranteed Loans A loan may be guaranteed under this subtitle only for— ####
(1)paying the costs incident to reorganizing a farm or ranch for more profitable operation; ####
(2)purchasing livestock, poultry, or farm or ranch equipment; ####
(3)purchasing feed, seed, fertilizer, insecticide, or farm or ranch supplies, or to meet other essential farm or ranch operating expenses, including cash rent; ####
(4)financing land or water development, use, or conservation; ####
(5)refinancing indebtedness; ####
(6)paying loan closing costs; ####
(7)assisting a farmer or rancher in changing the equipment, facilities, or methods of operation of a farm or ranch 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 the Act (29 U.S.C. 667), if the Secretary determines that without assistance under this paragraph the farmer or rancher is likely to suffer substantial economic injury due to compliance with the standard; ####
(8)training a borrower under section 359; or ####
(9)providing other farm, ranch, or home needs, including family subsistence. ###
(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 the property to be acquired with the loan. ####
(2)Determination Not later than 180 days after the date of enactment of this paragraph, the Secretary shall determine the appropriate level of insurance to be required by paragraph (1). ###
(d)Private Reserve ####
(1)In general Notwithstanding any other provision of this title, the Secretary may reserve a portion of any loan made under this subtitle 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. ####
(2)Limit on size of the reserve The size of the reserve shall not exceed the least of— #####
(A)10 percent of the loan; #####
(B)$5,000; or #####
(C)the amount needed to provide for the basic family needs of the borrower and the borrower's immediate family for 3 calendar months. ###
(e)Valuation of Local or Regional Crops ####
(1)In general 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. ####
(2)Price history 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.
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