Sec. 8.8. STANDARDS FOR QUALIFIED LOANS
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## SEC. 8.8 STANDARDS FOR QUALIFIED LOANS **[**[12 U.S.C. 2279aa–8](/us/usc/t12/s2279aa–8)**]** ###
(a)Standards ####
(1)In general The Corporation shall establish underwriting, security appraisal, and repayment standards for qualified loans taking into account the nature, risk profile, and other differences between different categories of qualified loans. ####
(2)Supervision, examination, and report of condition The standards shall be subject to the authorities of the Farm Credit Administration under section 8.11. ####
(3)Mortgage loans In establishing standards for qualified loans, the Corporation shall confine corporate operations, so far as practicable, to mortgage loans that are deemed by the Board to be of such quality so as to meet, substantially and generally, the purchase standards imposed by private institutional mortgage investors. ###
(b)Minimum Criteria To further the purpose of this title to provide a new source of long-term fixed rate financing to assist farmers and ranchers to purchase agricultural real estate, the standards established by the Board pursuant to subsection
(a)with respect to loans secured by agricultural real estate shall, at a minimum— ####
(1)provide that no agricultural mortgage loan with a loan-to-value ratio in excess of 80 percent may be treated as a qualified loan; ####
(2)require each borrower to demonstrate sufficient cash-flow to adequately service the agricultural mortgage loan; ####
(3)contain sufficient documentation standards; ####
(4)contain adequate standards to protect the integrity of the appraisal process with respect to any agricultural mortgage loans; ####
(5)contain adequate standards to ensure that the farmer or rancher is or will be actively engaged in agricultural production, and require the borrower to certify to the originator that the borrower intends to continue agricultural production on the farm or ranch involved; ####
(6)minimize speculation in agricultural real estate for nonagricultural purposes; and ####
(7)in establishing the value of agricultural real estate, consider the purpose for which the real estate is taxed. ###
(c)Loan Amount Limitation ####
(1)In general A loan secured by agricultural real estate may not be treated as a qualified loan if the principal amount of such loan exceeds $2,500,000, adjusted for inflation, except as provided in paragraph (2). ####
(2)Acreage exception Paragraph
(1)shall not apply with respect to any agricultural mortgage loan described in such paragraph if such loan is secured by agricultural real estate that, in the aggregate, comprises not more than 1,0008 acres. 8Section 5410(a) of Public Law 115–334 provides for an amendment to subsection (c)(2) by striking “1,000” and inserting “2,000”. Subsection
(b)of such section states: “The amendment made by subsection
(a)shall take effect 1 year after the date a report submitted in accordance with section 5414 of this Act indicates that it is feasible to increase the acreage limitation in section 8.8(c)(2) of the Farm Credit Act of 1971 to 2,000 acres.”. ###
(d)Nondiscrimination Requirement The standards established under subsection
(a)shall not discriminate against small originators or small agricultural mortgage loans that are at least $50,000. The Board shall promote and encourage the inclusion of qualified loans for small farms and family farmers in the agricultural mortgage secondary market.
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- 12 USC 2279aa–8
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