§2279aa–8. Standards for qualified loans

(a) Standards

Not later than 120 days after the appointment and election of the permanent Board, the Corporation, in consultation with originators, shall establish uniform underwriting, security appraisal, and repayment standards for qualified 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 subchapter 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) of this section 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 borrower 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 site 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 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 1,000 acres.

(d) Congressional review

No standard prescribed under subsection (a) of this section shall take effect before the later of-

(1) the end of a period consisting of 30 legislative days and beginning on the date such standards are submitted to the Congress; or

(2) the end of a period consisting of 90 calendar days and beginning on such date.

(e) Nondiscrimination requirement

The standards established under subsection (a) of this section 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.

(Pub. L. 92–181, title VIII, §8.8, as added Pub. L. 100–233, title VII, §702, Jan. 6, 1988, 101 Stat. 1700 ; amended Pub. L. 100–399, title VI, §601(i), Aug. 17, 1988, 102 Stat. 1005 ; Pub. L. 104–105, title I, §110, Feb. 10, 1996, 110 Stat. 165 .)

Amendments

1996-Subsec. (e). Pub. L. 104–105 inserted at end "The Board shall promote and encourage the inclusion of qualified loans for small farms and family farmers in the agricultural mortgage secondary market."

1988-Subsec. (a). Pub. L. 100–399 inserted "permanent" after "appointment and election of the".

Effective Date of 1988 Amendment

Amendment by Pub. L. 100–399 effective as if enacted immediately after enactment of Pub. L. 100–233, which was approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100–399, set out as a note under section 2002 of this title.

Section Referred to in Other Sections

This section is referred to in sections 2279aa, 2279aa–6 of this title.