SUBCHAPTER IV—ADMINISTRATIVE PROVISIONS
§1981. Farmers Home Administration
(a) Appointment and compensation of Administrator; transfer of powers, duties, and assets pertaining to agricultural credit
In accordance with
(b) Powers of Secretary of Agriculture
The Secretary may—
(1) administer his powers and duties through such national, area, State, or local offices and employees in the United States as he determines to be necessary and may authorize an office to serve the area composed of two or more States if he determines that the volume of business in the area is not sufficient to justify separate State offices, and until January 1, 1975, make contracts for services incident to making, insuring, collecting, and servicing loans and property as determined by the Secretary to be necessary for carrying out the purposes of this chapter; (and the Secretary shall prior to June 30, 1974, report to the Congress through the President on the experience in using such contracts, together with recommendations for such legislation as he may see fit);
(2) accept and utilize voluntary and uncompensated services, and, with the consent of the agency concerned, utilize the officers, employees, equipment, and information of any agency of the Federal Government, or of any State, territory, or political subdivision;
(3) within the limits of appropriations made therefor, make necessary expenditures for purchase or hire of passenger vehicles, and such other facilities and services as he may from time to time find necessary for the proper administration of this chapter;
(4) compromise, adjust, reduce, or charge-off debts or claims (including debts and claims arising from loan guarantees), and adjust, modify, subordinate, or release the terms of security instruments, leases, contracts, and agreements entered into or administered by the Consolidated Farm Service Agency,1 Rural Utilities Service, Rural Housing Service, Rural Business-Cooperative Service, or a successor agency, or the Rural Development Administration, except for activities under the Housing Act of 1949 [
(5) except for activities conducted under the Housing Act of 1949 [
(6) release mortgage and other contract liens if it appears that they have no present or prospective value or that their enforcement likely would be ineffectual or uneconomical;
(7) obtain fidelity bonds protecting the Government against fraud and dishonesty of officers and employees of the Farmers Home Administration in lieu of faithful performance of duties bonds under section 14 2 of title 6, and regulations issued pursuant thereto, but otherwise in accordance with the provisions thereof;
(8) consent to (A) long-term leases of facilities financed under this subchapter notwithstanding the failure of the lessee to meet any of the requirements of this subchapter if such long-term leases are necessary to ensure the continuation of services for which financing was extended to the lessor, and (B) the transfer of property securing any loan or financed by any loan or grant made, insured, or held by the Secretary under this chapter, or the provisions of any other law administered by the Rural Development Administration under this chapter or by the Farmers Home Administration, upon such terms as he deems necessary to carry out the purpose of the loan or grant or to protect the financial interest of the Government, and shall document the consent of the Secretary for the transfer of the property of a borrower in the file of the borrower; and
(9) notwithstanding that an area ceases, or has ceased, to be "rural", in a "rural area", or an eligible area, make loans and grants, and approve transfers and assumptions, under this chapter on the same basis as though the area still was rural in connection with property securing any loan made, insured, or held by the Secretary under this chapter or in connection with any property held by the Secretary under this chapter.
(c) Delinquent claims and obligations
The Secretary may use for the prosecution or defense of any claim or obligation described in subsection (b)(5) the Attorney General, the General Counsel of the Department of Agriculture, or a private attorney who has entered into a contract with the Secretary.
(d) Rural college coordinated strategy
(1) In general
The Secretary shall develop a coordinated strategy across the relevant programs within the Rural Development mission areas to serve the specific, local needs of rural communities when making investments in rural community colleges and technical colleges through other authorities in effect on February 7, 2014.
(2) Consultation
In developing a coordinated strategy, the Secretary shall consult with groups representing rural-serving community colleges and technical colleges to coordinate critical investments in rural community colleges and technical colleges involved in workforce training.
(3) Administration
Nothing in this subsection provides a priority for funding under authorities in effect on February 7, 2014.
(4) Use
The Secretary shall use the coordinated strategy and information developed for the strategy to more effectively serve rural communities with respect to investments in community colleges and technical colleges.
(e) Development of rural broadband infrastructure
(1) Except as provided in paragraph (2), the Secretary may allow a recipient of a grant, loan, or loan guarantee provided by the Office of Rural Development under this chapter to use not more than 10 percent of the amount so provided—
(A) for any activity for which assistance may be provided under section 601 of the Rural Electrification Act of 1936 [
(B) to construct other broadband infrastructure.
(2) Paragraph (1) of this subsection shall not apply to a recipient who is seeking to provide retail broadband service in any area where retail broadband service is available at the minimum broadband speeds, as defined under section 601(e) of the Rural Electrification Act of 1936 [
(3) The Secretary shall not provide funding under paragraph (1) if the funding would result in competitive harm to any grant, loan, or loan guarantee provided under the Rural Electrification Act of 1936.
(f) Access to information to verify income for participants in certain rural housing programs
The Secretary and the designees of the Secretary are hereby granted the same access to information and subject to the same requirements applicable to the Secretary of Housing and Urban Development as provided in
(
References in Text
This chapter, referred to in subsecs. (a), (b)(1), (3), (8), (9), and (e)(1), was in the original "this title", meaning title III of
The Farmers Home Administration Act of 1946, as amended, referred to in subsec. (a), is act Aug. 14, 1946, ch. 964,
The Bankhead-Jones Farm Tenant Act, as amended, referred to in subsec. (a), is act July 22, 1937, ch. 517,
Act of August 28, 1937, as amended, referred to in subsec. (a), is act Aug. 28, 1937, ch. 870,
Act of April 6, 1949, as amended, referred to in subsec. (a), is act Apr. 6, 1949, ch. 49,
Act of August 31, 1954, as amended, referred to in subsec. (a), is act Aug. 31, 1954, ch. 1145,
The Housing Act of 1949, as amended, referred to in subsec. (b)(4), (5), is act July 15, 1949, ch. 338,
The Rural Electrification Act of 1936, referred to in subsecs. (b)(4) and (e)(3), is act May 20, 1936, ch. 432,
Amendments
2018—Subsec. (e).
Subsec. (f).
2014—Subsec. (d).
2002—Subsec. (b)(4).
"(A) with respect to farmer program loans, on terms more favorable than those recommended by the appropriate county committee utilized pursuant to
"(B) after".
Subsecs. (d), (e).
1996—Subsec. (b)(4).
Subsec. (d).
Subsec. (e).
1994—Subsec. (a).
Subsec. (c).
1991—
Subsec. (b)(1), (2).
Subsec. (b)(3).
Subsec. (b)(4).
Subsec. (b)(4)(A).
Subsec. (b)(4)(B).
Subsec. (b)(5).
Subsec. (b)(6).
Subsec. (b)(7).
Subsec. (b)(8).
Subsec. (b)(9).
Pars. (c) to (g).
Par. (h).
Pars. (i), (j).
1990—
Subsec. (a).
Subsec. (b).
Subsec. (b)(1) to (3).
Subsec. (b)(4).
Subsec. (b)(4)(A).
Subsec. (b)(4)(B).
Subsec. (b)(5).
Subsec. (b)(6).
Subsec. (b)(7).
Subsec. (b)(8).
Subsec. (b)(9).
Pars. (c) to (g).
Par. (h).
Pars. (i), (j).
1988—Par. (d).
1985—Par. (d).
1981—Par. (i).
1978—
1972—Par. (a).
Pars. (d) to (i).
1968—Par. (f).
Change of Name
Consolidated Farm Service Agency effectively renamed Farm Service Agency by the amendments made to
Effective Date of 2002 Amendment
Effective Date of 1991 Amendment
Amendment by section 501(c) of
Effective Date of 1981 Amendment
Amendment by
Continuation of Small Farmer Training and Technical Assistance Program
Reamortization of Distressed Farmers Home Administration Loans From Revenues From Softwood Timber Crop Plantings on Marginal Land
"(a)(1) Notwithstanding any other provision of law, the Secretary of Agriculture (hereinafter in this section referred to as the 'Secretary') may implement a program, pursuant to the recommendations contained in the study mandated by section 608 of the Agricultural Programs Adjustment Act of 1984 (
"(A) was previously used to produce an agricultural commodity or as pasture; and
"(B) secures a loan made or insured under such Act.
"(2) Accrued interest on a loan reamortized under this section may be capitalized and interest charged on such interest.
"(3) All or a portion of the payments on such reamortized loan may be deferred until such softwood timber crop produces revenue or for a term of 45 years, whichever comes first.
"(4) Repayment of such reamortized loan shall be made not later than 50 years after the date of reamortization.
"(b) The interest rate on such reamortized loans shall be determined by the Secretary, but not in excess of the current average yield on outstanding marketable obligations of the United States with periods to maturity comparable to the average maturities of such loans, plus not to exceed 1 percent, as determined by the Secretary and adjusted to the nearest one-eighth of 1 percent.
"(c) To be eligible for such program—
"(1) the borrower of such reamortized loan must place not less than 50 acres of such land in softwood timber production;
"(2) such land (including timber) may not have any lien against such land other than a lien for—
"(A) a loan made or insured under the Consolidated Farm and Rural Development Act [
"(B) a loan made under this section, at the time of reamortization or thereafter, that is subject to a lien on such land (including timber) in favor of the Secretary; and
"(3) the total amount of loans secured by such land (including timber) may not exceed $1,000 per acre.
"(d)(1) To assist such borrowers to place such land in softwood timber production, the Secretary may make loans to such borrowers for such purpose in an aggregate amount not to exceed the actual cost of tree planting for land placed in the program.
"(2) Any such loan shall be secured by the land (including timber) on which the trees are planted.
"(3) Such loans shall be made on the same terms and conditions as are provided in this section for reamortized loans.
"(e) The Secretary shall issue such rules as are necessary to carry out this section, including rules prescribing terms and conditions for—
"(1) reamortizing and making loans under this section;
"(2) entering into security instruments and agreements under this section; and
"(3) management and harvesting practices of the timber crop.
"(f) There are authorized to be appropriated such sums as are necessary to carry out this section.
"(g) No more than 50,000 acres may be placed in such program."
1 See Change of Name note below.
2 See References in Text note below.
§1981a. Loan moratorium and policy on foreclosures
(a) In general
In addition to any other authority that the Secretary may have to defer principal and interest and forego foreclosure, the Secretary may permit, at the request of the borrower, the deferral of principal and interest on any outstanding loan made, insured, or held by the Secretary under this chapter, or under the provisions of any other law administered by the Farmers Home Administration or by the Rural Development Administration, and may forego foreclosure of any such loan, for such period as the Secretary deems necessary upon a showing by the borrower that due to circumstances beyond the borrower's control, the borrower is temporarily unable to continue making payments of such principal and interest when due without unduly impairing the standard of living of the borrower. The Secretary may permit interest that accrues during the deferral period on any loan deferred under this section to bear no interest during or after such period: Provided, That if the security instrument securing such loan is foreclosed such interest as is included in the purchase price at such foreclosure shall become part of the principal and draw interest from the date of foreclosure at the rate prescribed by law.
(b) Moratorium
(1) In general
Subject to the other provisions of this subsection, effective beginning on the date of the enactment of this subsection, there shall be in effect a moratorium, with respect to farmer program loans made under subchapter I, II, or III, on all acceleration and foreclosure proceedings instituted by the Department of Agriculture against any farmer or rancher who—
(A) has pending against the Department a claim of program discrimination that is accepted by the Department as valid; or
(B) files a claim of program discrimination that is accepted by the Department as valid.
(2) Waiver of interest and offsets
During the period of the moratorium, the Secretary shall waive the accrual of interest and offsets on all farmer program loans made under subchapter I, II, or III for which loan acceleration or foreclosure proceedings have been suspended under paragraph (1).
(3) Termination of moratorium
The moratorium shall terminate with respect to a claim of discrimination by a farmer or rancher on the earlier of—
(A) the date the Secretary resolves the claim; or
(B) if the farmer or rancher appeals the decision of the Secretary on the claim to a court of competent jurisdiction, the date that the court renders a final decision on the claim.
(4) Failure to prevail
If a farmer or rancher does not prevail on a claim of discrimination described in paragraph (1), the farmer or rancher shall be liable for any interest and offsets that accrued during the period that loan acceleration or foreclosure proceedings have been suspended under paragraph (1).
(
References in Text
This chapter, referred to in subsec. (a), was in the original "this title", meaning title III of
The date of the enactment of this subsection, referred to in subsec. (b)(1), is the date of enactment of
Codification
Prior Provisions
Provisions similar to those in this section were contained in the following appropriation acts:
Amendments
2008—
1990—
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Forbearance and Restructuring for Farm Loans
"(1) exercise forbearance in the collection of interest and principal on direct farmer program loans under the Consolidated Farm and Rural Development Act [
"(2) expedite the use of credit restructuring and other credit relief mechanisms authorized under the Agricultural Credit Act of 1987 [
"(3) encourage commercial lenders participating in guaranteed farmer lending programs under the Consolidated Farm and Rural Development Act to exercise forbearance before declaring loans to such farmers and ranchers under such programs in default."
§1981b. Farm loan interest rates
Any loan for farm ownership purposes under subchapter I of this chapter, farm operating purposes under subchapter II of this chapter, or disaster emergency purposes under subchapter III of this chapter, other than a guaranteed loan, that is deferred, consolidated, rescheduled, or reamortized under this chapter shall, notwithstanding any other provision of this chapter, 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—
(1) the rate of interest on the original loan;
(2) 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
(3) 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.
(
References in Text
This chapter, referred to in text, was in the original "this title", meaning title III of
Amendments
2002—
Adjustment of Interest Rates
§1981c. Oil and gas royalty payments on loans
(a) The Secretary shall permit a borrower of a loan made or insured under this chapter to make a prospective payment on such loan with proceeds from—
(1) the leasing of oil, gas, or other mineral rights to real property used to secure such loan; or
(2) the sale of oil, gas, or other minerals removed from real property used to secure such loan, if the value of the rights to such oil, gas, or other minerals has not been used to secure such loan.
(b) Subsection (a) shall not apply to a borrower of a loan made or insured under this chapter with respect to which a liquidation or foreclosure proceeding is pending on December 23, 1985.
(
References in Text
This chapter, referred to in text, was in the original "this title", meaning title III of
§1981d. Notice of loan service programs
(a) Requirement
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 or insured under this chapter.
(b) Contents
The notice required under subsection (a) shall—
(1) include a summary of all primary loan service programs, preservation loan service programs, debt settlement programs, and appeal procedures, including the eligibility criteria, and terms and conditions of such programs and procedures;
(2) 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 such programs or waive any right in order to be considered for any program carried out by the Secretary;
(3) advise the borrower regarding all filing requirements and any deadlines that must be met for requesting loan servicing;
(4) provide any relevant forms, including applicable response forms;
(5) advise the borrower that a copy of regulations is available on request; and
(6) be designed to be readable and understandable by the borrower.
(c) Contained in regulations
All notices required by this section shall be contained in the regulations implementing this chapter.
(d) Timing
The notice described in subsection (b) shall be provided—
(1) at the time an application is made for participation in a loan service program;
(2) on written request of the borrower; and
(3) before the earliest of—
(A) initiating any liquidation;
(B) requesting the conveyance of security property;
(C) accelerating the loan;
(D) repossessing property;
(E) foreclosing on property; or
(F) taking any other collection action.
(e) Consideration of borrowers for loan service programs
The Secretary shall consider a farmer program borrower for all loan service programs if, within 60 days after receipt of the notice required in this section or, in extraordinary circumstances as determined by the applicable State director, after the 60-day period, the borrower requests such consideration in writing. In considering a borrower for loan service programs, the Secretary shall place the highest priority on the preservation of the borrower's farming operations.
(
References in Text
This chapter, referred to in subsecs. (a) and (c), was in the original "this title", meaning title III of
Amendments
2018—Subsec. (e).
1996—Subsec. (a).
1992—Subsec. (e).
1990—Subsec. (b)(1).
Subsec. (e).
Effective Date of 2018 Amendment
Effective Date of 1996 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by section 1807(1) of
§1981e. Planting and production history guidelines
(a) In general
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 applicant's past production history has been affected by natural disasters declared under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (
(b) Calculation of yields
(1) In general
For purposes of averaging past yields of the farm of a borrower or applicant over a period of crop years to calculate future yields for the farm under this chapter (except for loans under subchapter III), the Secretary shall permit the borrower or applicant to exclude the crop year with the lowest actual or county average yield for the farm from the calculation, if the borrower or applicant was affected by a disaster during at least 2 of the crop years during the period.
(2) Affected by a disaster
For purposes of paragraph (1), a borrower or applicant was affected by a disaster if the Secretary finds that the borrower or applicant's farming operations have been substantially affected by a natural disaster in the United States or by a major disaster or emergency designated by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (
(3) Application of subsection
Paragraph (1) shall apply to all actions taken by the Secretary to carry out this chapter (except for loans under subchapter III) that involve the yields of a farm of a borrower or applicant, including making loans and loan guarantees, servicing loans, and making credit sales.
(
References in Text
The Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsecs. (a) and (b)(2), is
This chapter, referred to in subsec. (b)(1), (3), was in the original "this title", meaning title III of
Amendments
1992—Subsec. (a).
Subsec. (b)(2).
1991—
Effective Date of 1992 Amendment
Effective Date of 1991 Amendment
"(A)
"(B)
Regulations
"(A)
"(B)
§1981f. Underwriting forms and standards
In the administration of this chapter, 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.
(
References in Text
This chapter, referred to in text, was in the original "this title", meaning title III of
Regulations
§1982. Relief for mobilized military reservists from certain agricultural loan obligations
(a) Definition of mobilized military reservist
In this section, the term "mobilized military reservist" means an individual who—
(1) is on active duty under section 688, 12301(a), 12301(g), 12302, 12304, 12306, or 12406, or
(2) in the case of a member of the National Guard, is on full-time National Guard duty (as defined in
(b) Forgiveness of interest payments due while borrower is a mobilized military reservist
Any requirement that a borrower of a direct loan made under this chapter 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.
(c) Deferral of principal payments due while or after borrower is a mobilized military reservist
The due date of any payment of principal on a direct loan made to a borrower under this chapter 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.
(d) Nonaccrual of interest
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.
(e) Borrower not considered to be delinquent or receiving debt forgiveness
Notwithstanding
(
References in Text
This chapter, referred to in subsecs. (b), (c), and (e), was in the original "this title", meaning title III of
Prior Provisions
A prior section 1982,
Amendments
2018—Subsec. (a)(1).
§1983. Special conditions and limitations on loans
In connection with loans made or insured under this chapter, the Secretary shall—
(1) require the applicant (A) to certify in writing, and the Secretary shall determine, that he is unable to obtain sufficient credit elsewhere to finance his actual needs at reasonable rates and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near which the applicant resides for loans for similar purposes and periods of time, and (B) to furnish an appropriate written financial statement;
(2) except with respect to a loan under
(A) an annual review of the credit history and business operation of the borrower; and
(B) an annual review of the continued eligibility of the borrower for the loan;
(3) except for guaranteed loans, require an agreement by the borrower that if at any time it shall appear 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
(4) require such provision for supervision of the borrower's operations as the Secretary shall deem necessary to achieve the objectives of the loan and protect the interests of the United States;
(5) require the application of a person who is a veteran of any war, as defined in
(6) in the case of water and waste disposal direct and guaranteed loans provided under
(A) maximizing the use of loan guarantees to finance eligible projects in rural communities in which the population exceeds 5,500;
(B) maximizing the use of direct loans to finance eligible projects in rural communities if the impact on ratepayers will be material when compared to financing with a loan guarantee;
(C) establishing and applying a materiality standard when determining the difference in impact on ratepayers between a direct loan and a loan guarantee;
(D) in the case of projects that require interim financing in excess of $500,000, requiring that the projects initially seek the financing from private or cooperative lenders; and
(E) determining if an existing direct loan borrower can refinance with a private or cooperative lender, including with a loan guarantee, prior to providing a new direct loan; and
(7) in the case of an insured or guaranteed loan issued or modified under
(
References in Text
This chapter, referred to in text, was in the original "this title", meaning title III of
Amendments
2018—Par. (7).
2014—
Par. (1).
Par. (2).
Par. (3).
Par. (4).
Par. (5).
Par. (6).
2002—Par. (2).
"(A) that an annual review of the credit history and business operation of the borrower has been conducted; and
"(B) that a review of the continued eligibility of the borrower for the loan has been conducted;".
1996—Par. (1)(B).
Pars. (2) to (4).
Par. (5).
1994—Pars. (2) to (5).
1992—Par. (2)(A)(iii).
1991—Par. (2)(A).
1990—
1981—Par. (a).
1980—Par. (b).
1978—Par. (b).
Par. (c).
1972—Par. (a).
Par. (b).
1970—
1968—Par. (b).
Effective Date of 1991 Amendment
Amendment by
Effective Date of 1981 Amendment
Amendment by
§1983a. Prompt approval of loans and loan guarantees
(a) Applications; time for action by Secretary; notice; statement of reasons
(1) The Secretary shall approve or disapprove an application for a loan or loan guarantee made under this chapter, and notify the applicant of such action, not later than 60 days after the Secretary has received a complete application for such loan or loan guarantee.
(2)(A) If an application for a loan or loan guarantee under this chapter (other than under subchapter II) is incomplete, the Secretary shall inform the applicant of the reasons such application is incomplete not later than 20 days after the Secretary has received such application.
(B)(i) Not later than 10 calendar days after the Secretary receives an application for an operating loan or loan guarantee under subchapter II, the Secretary shall notify the applicant of any information required before a decision may be made on the application. On receipt of an application, the Secretary shall request from other parties such information as may be needed in connection with the application.
(ii) Not later than 15 calendar days after the date an agency of the Department of Agriculture receives a request for information made pursuant to clause (i), the agency shall provide the Secretary with the requested information.
(iii) 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 Farmers Home Administration, in writing, of the outstanding information.
(iv) A county office shall notify the district office of the Farmers Home Administration of each application for an operating loan or loan guarantee under subchapter II that is pending more than 45 days after receipt, and the reasons the application is pending.
(v) A district office that receives a notice provided under clause (iv) 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.
(vi) The district office shall report to the State office of the Farmers Home Administration on each application for an operating loan or loan guarantee under subchapter II that is pending more than 45 days after receipt by the county committee, and the reasons the application is pending.
(vii) 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 under subchapter II of this chapter on which final action had not been taken within 60 calendar days after receipt by the Secretary, and the reasons final action had not been taken.
(3) If an application for a loan or loan guarantee under this chapter is disapproved by the Secretary, the Secretary shall state the reasons for the disapproval in the notice required under paragraph (1).
(4)(A) Notwithstanding paragraph (1), each application for a loan or loan guarantee under
(B) The Secretary shall retain the pending application and reconsider the application beginning on the date that sufficient funds become available.
(C) 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.
(b) Loan proceeds; time for receipt
(1) Except as provided in paragraph (2), if an application for an insured loan under this chapter 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.
(2) If the Secretary is unable to provide the loan proceeds to the applicant within such 15-day period because sufficient funds are not available to the Secretary for such 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 such purpose become available to the Secretary.
(c) Reconsideration of applications; time for action by Secretary
If an application for a loan or loan guarantee under this chapter is disapproved by the Secretary, but such action is subsequently reversed or revised as the result of an appeal within the Department of Agriculture 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 within 15 days after return of the application to the Secretary.
(d) Approved lender designation applications; time for decision by Secretary
In carrying out the approved lender program established by exhibit A to subpart B of part 1980 of title 7, Code of Federal Regulations, the Secretary shall ensure that each request of a lending institution for designation as an approved lender under such program is reviewed, and a decision made on the application, not later than 15 days after the Secretary has received a complete application for such designation.
(e) Processing loan applications; personnel and other resources made available; use of authorities of law
(1) As soon as practicable after December 23, 1985, the Secretary shall take such steps as are necessary to make personnel, including the payment of overtime for such personnel, and other resources of the Department of Agriculture available to the Farmers Home Administration as are sufficient to enable the Farmers Home Administration to expeditiously process loan applications that are submitted by farmers and ranchers.
(2) In carrying out paragraph (1), the Secretary may use any authority of law provided to the Secretary, including—
(A) the Agricultural Credit Insurance Fund established under
(B) the employment procedures used in connection with the emergency loan program established under subchapter III.
(f) Graduation of seasoned direct loan borrowers to loan guarantee program
(1) As used in this subsection:
(A) The term "approved lender" means a lender approved prior to October 28, 1992, by the Secretary under the approved lender program established by exhibit A to subpart B of part 1980 of title 7, Code of Federal Regulations (as in effect on January 1, 1991), or a lender certified under section 1989 1 of this title.
(B) The term "seasoned direct loan borrower" means a borrower receiving a direct loan under this chapter who has been classified as "commercial" or "standard" under subpart W of part 2006 of the Instruction Manual (as in effect on January 1, 1991).
(2) The Secretary, or a contracting third party, shall annually review under
(3) In accordance with
(4)
(A)
(B)
(C)
(5) If the Secretary is unable to provide loan guarantees and, if necessary, interest assistance to the seasoned direct loan borrower under this subsection 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 an insured loan to the seasoned direct loan borrower under subchapter I or II, whichever is applicable.
(6) 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
(g) Simplified application forms for loan guarantees
(1) In general
The Secretary shall provide to lenders a short, simplified application form for guarantees under this chapter of—
(A) farmer program loans the principal amount of which is $125,000 or less; and
(B) business and industry guaranteed loans under
(i) in the case of a loan guarantee made during fiscal year 2002 or 2003, $400,000 or less; and
(ii) in the case of a loan guarantee made during any subsequent fiscal year—
(I) $400,000 or less; or
(II) if the Secretary determines that there is not a significant increased risk of a default on the loan, $600,000 or less.
(2) Water and waste disposal grants and loans
The Secretary shall develop an application process that accelerates, to the maximum extent practicable, the processing of applications for water and waste disposal grants or direct or guaranteed loans under paragraph (1) or (2) of
(3) Administration
In developing an application under this subsection, the Secretary shall—
(A) consult with commercial and cooperative lenders; and
(B) ensure that—
(i) the form can be completed manually or electronically, at the option of the lender;
(ii) the form minimizes the documentation required to accompany the form;
(iii) the cost of completing and processing the form is minimal; and
(iv) the form can be completed and processed in an expeditious manner.
(h) Simplified application forms
Except as provided in subsection (g)(2), the Secretary shall, to the maximum extent practicable, develop a simplified application process, including a single page application if practicable, for grants and relending authorized under
(
References in Text
This chapter, referred to in subsecs. (a), (b)(1), (c), (f)(1)(B), and (g)(1), was in the original "this title", meaning title III of
Codification
Amendments
2018—Subsec. (f)(1)(A).
Subsec. (h).
2014—Subsec. (h).
2008—Subsec. (g)(1)(B).
2002—Subsec. (g).
"(1) The Secretary shall provide to lenders a short, simplified application form for guarantees under this chapter of loans the principal amount of which is $125,000 or less.
"(2) In developing the application, the Secretary shall—
"(A) consult with commercial and cooperative lenders; and
"(B) ensure that—
"(i) the form can be completed manually or electronically, at the option of the lender;
"(ii) the form minimizes the documentation required to accompany the form;
"(iii) the cost of completing and processing the form is minimal; and
"(iv) the form can be completed and processed in an expeditious manner."
Subsec. (g)(1).
1996—Subsec. (f)(4).
Subsec. (f)(4)(A).
Subsec. (f)(4)(B), (C).
1992—Subsec. (a)(2).
Subsec. (f).
Subsec. (g).
1990—Subsec. (a)(4).
Subsec. (c).
Effective Date of 2018 Amendment
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date
1 See References in Text note below.
§1983b. Beginning farmer and rancher individual development accounts pilot program
(a) Definitions
In this section:
(1) Demonstration program
The term "demonstration program" means a demonstration program carried out by a qualified entity under the pilot program established in subsection (b)(1).
(2) Eligible participant
The term "eligible participant" means a qualified beginning farmer or rancher that—
(A) lacks significant financial resources or assets; and
(B) has an income that is less than—
(i) 80 percent of the median income of the State in which the farmer or rancher resides; or
(ii) 200 percent of the most recent annual Federal Poverty Income Guidelines published by the Department of Health and Human Services for the State.
(3) Individual development account
The term "individual development account" means a savings account described in subsection (b)(4)(A).
(4) Qualified entity
(A) In general
The term "qualified entity" means—
(i) 1 or more organizations—
(I) described in
(II) exempt from taxation under section 501(a) of such title; or
(ii) a State, local, or tribal government submitting an application jointly with an organization described in clause (i).
(B) No prohibition on collaboration
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.
(b) Pilot program
(1) In general
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—
(A) of at least 5 years in duration; and
(B) in at least 15 States.
(2) Coordination
The Secretary shall operate the pilot program through, and in coordination with the farm loan programs of, the Farm Service Agency.
(3) Reserve funds
(A) In general
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.
(B) Federal funds
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.
(C) Use of funds
Of the funds deposited under subparagraph (B) in the reserve fund established for a demonstration program, the qualified entity carrying out the demonstration program—
(i) may use up to 10 percent for administrative expenses; and
(ii) shall use the remainder in making matching awards described in paragraph (4)(B)(ii)(I).
(D) Interest
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.
(E) Guidance
The Secretary shall issue guidance regarding the investment requirements of reserve funds established under this paragraph.
(F) Reversion
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—
(i) the amount of Federal funds deposited in the reserve fund under subparagraph (B) that were not used for administrative expenses; divided by
(ii) the total amount of funds deposited in the reserve fund.
(4) Individual development accounts
(A) In general
A qualified entity receiving a grant under this section shall establish and administer individual development accounts for eligible participants.
(B) Contract requirements
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—
(i) the eligible participant agrees—
(I) 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;
(II) to use the funds described in subclause (I) only for 1 or more eligible expenditures described in paragraph (5)(A); and
(III) to complete financial training; and
(ii) the qualified entity agrees—
(I) 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
(II) with uses of funds proposed by the eligible participant.
(C) Limitation
(i) In general
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.
(ii) Treatment of amount
An amount provided under clause (i) shall not be considered to be a gift or loan for mortgage purposes.
(5) Eligible expenditures
(A) In general
An eligible expenditure described in this subparagraph is an expenditure—
(i) to purchase farmland or make a down payment on an accepted purchase offer for farmland;
(ii) to make mortgage payments on farmland purchased pursuant to clause (i), for up to 180 days after the date of the purchase;
(iii) to purchase breeding stock, fruit or nut trees, or trees to harvest for timber; and
(iv) for other similar expenditures, as determined by the Secretary.
(B) Timing
(i) In general
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.
(ii) Unexpended funds
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.
(c) Applications
(1) In general
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.
(2) Criteria
In considering whether to approve an application to carry out a demonstration program under this section, the Secretary shall assess—
(A) the degree to which the demonstration program described in the application is likely to aid eligible participants in successfully pursuing new farming opportunities;
(B) the experience and ability of the qualified entity to responsibly administer the demonstration program;
(C) 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;
(D) 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;
(E) the adequacy of the plan of the qualified entity to provide information relevant to an evaluation of the demonstration program; and
(F) such other factors as the Secretary considers to be appropriate.
(3) Preferences
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) a track record of serving clients targeted by the program, including, as appropriate, socially disadvantaged farmers or ranchers (as defined in
(B) expertise in dealing with financial management aspects of farming.
(4) Approval
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.
(5) Term of authority
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).
(d) Grant authority
(1) In general
The Secretary shall make a grant to a qualified entity authorized to carry out a demonstration program under this section.
(2) Maximum amount of grants
The aggregate amount of grant funds provided to a demonstration program carried out under this section shall not exceed $250,000.
(3) Timing of grant payments
The Secretary shall pay the amounts awarded under a grant made under this section—
(A) on the awarding of the grant; or
(B) pursuant to such payment plan as the qualified entity may specify.
(e) Reports
(1) Annual progress reports
(A) In general
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—
(i) an evaluation of the progress of the demonstration program;
(ii) information about the demonstration program, including the eligible participants and the individual development accounts that have been established; and
(iii) such other information as the Secretary may require.
(B) Submission of reports
A qualified entity shall submit each report required under subparagraph (A) to the Secretary.
(2) Reports by 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.
(f) Annual review
The Secretary may conduct an annual review of the financial records of a qualified entity—
(1) to assess the financial soundness of the qualified entity; and
(2) to determine the use of grant funds made available to the qualified entity under this section.
(g) Regulations
In carrying out this section, the Secretary may promulgate regulations to ensure that the program includes provisions for—
(1) the termination of demonstration programs;
(2) control of the reserve funds in the case of such a termination;
(3) transfer of demonstration programs to other qualified entities; and
(4) 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.
(h) Authorization of appropriations
There is authorized to be appropriated to carry out this section $5,000,000 for each of fiscal years 2008 through 2023.
(
References in Text
The date of enactment of this section, referred to in subsec. (c)(4), is the date of enactment of
Codification
Prior Provisions
A prior section 1983b,
Amendments
2018—Subsec. (h).
2014—Subsec. (h).
Effective Date
Enactment of this section and repeal of
§1983c. Provision of information to borrowers
(a) In general
On request of a farm borrower of a farmer program loan, the Secretary shall make available to the borrower the following:
(1) One copy of each document signed by the borrower.
(2) One copy of each appraisal performed with respect to the loan.
(3) All documents that the Secretary otherwise is required to provide to the borrower under any law or rule of law in effect on the date of such request.
(b) Construction of section
Subsection (a) shall not be construed to supersede any duty imposed on the Secretary by any law or rule of law in effect immediately before January 6, 1988, unless such duty is in direct conflict with any duty imposed by subsection (a).
(
§1983d. Farmer loan pilot projects
(a) In general
The Secretary may conduct pilot projects of limited scope and duration that are consistent with subchapter I through this subchapter to evaluate processes and techniques that may improve the efficiency and effectiveness of the programs carried out under subchapter I through this subchapter.
(b) Notification
The Secretary shall—
(1) 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
(2) consider any recommendations or feedback provided to the Secretary in response to the notice provided under paragraph (1).
(
§1984. Taxation
All property subject to a lien held by the United States or the title to which is acquired or held by the Secretary under this chapter other than property used for administrative purposes shall be subject to taxation by State, territory, district, and local political subdivisions in the same manner and to the same extent as other property is taxed: Provided, however, That no tax shall be imposed or collected on or with respect to any instrument if the tax is based on—
(1) the value of any notes or mortgages or other lien instruments held by or transferred to the Secretary;
(2) any notes or lien instruments administered under this chapter which are made, assigned, or held by a person otherwise liable for such tax; or
(3) the value of any property conveyed or transferred to the Secretary,
whether as a tax on the instrument, the privilege of conveying or transferring or the recordation thereof; nor shall the failure to pay or collect any such tax be a ground for refusal to record or file such instruments, or for failure to impart notice, or prevent the enforcement of its provisions in any State or Federal court.
(
References in Text
This chapter, referred to in text, was in the original "this title", meaning title III of
§1985. Security servicing
(a) Preservation and protection of security, lien, or priority of lien securing loan
The Secretary is authorized and empowered to make advances, without regard to any loan or total indebtedness limitation, to preserve and protect the security for or the lien or priority of the lien securing any loan or other indebtedness owing to, insured by, or acquired by the Secretary under this chapter or under any other programs administered by the Farmers Home Administration or the Rural Development Administration; to bid for and purchase at any execution, foreclosure, or other sale or otherwise to acquire property upon which the United States has a lien by reason of a judgment or execution arising from, or which is pledged, mortgaged, conveyed, attached, or levied upon to secure the payment of, any such indebtedness whether or not such property is subject to other liens, to accept title to any property so purchased or acquired; and to sell, manage, or otherwise dispose of such property as hereinafter provided.
(b) Operation or lease of realty
Except as provided in subsections (c) and (e), real property administered under the provisions of this chapter may be operated or leased by the Secretary for such period or periods as the Secretary may deem necessary to protect the Government's investment therein.
(c) Sale of property
(1) In general
Subject to this subsection and subsection (e)(1)(A), the Secretary shall offer to sell real property that is acquired by the Secretary under this chapter using the following order and method of sale:
(A) Advertisement
Not later than 15 days after acquiring real property, the Secretary shall publicly advertise the property for sale.
(B) Beginning farmer or rancher; socially disadvantaged farmer or rancher
(i) In general
Not later than 135 days after acquiring real property, the Secretary shall offer to sell the property to a qualified beginning farmer or rancher or a socially disadvantaged farmer or rancher at current market value based on a current appraisal.
(ii) Random selection
If more than 1 qualified beginning farmer or rancher or socially disadvantaged farmer or rancher offers to purchase the property, the Secretary shall select between the qualified applicants on a random basis.
(iii) Appeal of random selection
A random selection or denial by the Secretary of a beginning farmer or rancher or a socially disadvantaged farmer or rancher for farm inventory property under this subparagraph shall be final and not administratively appealable.
(iv) Combining and dividing of property
To the maximum extent practicable, the Secretary shall maximize the opportunity for beginning farmers or ranchers and socially disadvantaged farmers or ranchers to purchase real property acquired by the Secretary under this chapter by combining or dividing inventory parcels of the property in such manner as the Secretary determines to be appropriate.
(C) Public sale
If no acceptable offer is received from a qualified beginning farmer or rancher or a socially disadvantaged farmer or rancher 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.
(2) Previous lease
In the case of real property acquired before April 4, 1996, that the Secretary leased before April 4, 1996, not later than 60 days after the lease expires, the Secretary shall offer to sell the property in accordance with paragraph (1).
(3) Interest
(A) In general
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.
(B) Conservation
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.
(4) Other law
Chapters 1 to 11 of title 40 and division C (except sections 3302, 3307(e), 3501(b), 3509, 3906, 4710, and 4711) of subtitle I of title 41 shall not apply to any exercise of authority under this chapter.
(5) Lease of property
(A) In general
Subject to subparagraph (B), the Secretary may not lease any real property acquired under this chapter.
(B) Exception
(i) Beginning farmer or rancher; socially disadvantaged farmer or rancher
The Secretary may lease or contract to sell to a beginning farmer or rancher or a socially disadvantaged farmer or rancher a farm or ranch acquired by the Secretary under this chapter if the beginning farmer or rancher or the socially disadvantaged farmer or rancher qualifies for a credit sale or direct farm ownership loan under subchapter I but credit sale authority for loans or direct farm ownership loan funds, respectively, are not available.
(ii) Term
The term of a lease or contract to sell to a beginning farmer or rancher or a socially disadvantaged farmer or rancher under clause (i) shall be until the earlier of—
(I) the date that is 18 months after the date of the lease or sale; or
(II) the date that direct farm ownership loan funds or credit sale authority for loans becomes available to the beginning farmer or rancher or the socially disadvantaged farmer or rancher.
(iii) Income-producing capability
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.
(6) Expedited determination
(A) In general
On the request of an applicant, not later than 30 days after denial of the applicant's application, the appropriate State director shall provide an expedited review and determination of whether the applicant is a beginning farmer or rancher or a socially disadvantaged farmer or rancher for the purpose of acquiring farm inventory property.
(B) Appeal
The determination of a State Director under subparagraph (A) shall be final and not administratively appealable.
(C) Effects of determinations
(i) In general
The Secretary shall maintain statistical data on the number and results of determinations made under subparagraph (A) and the effect of the determinations on—
(I) selling farm inventory property to beginning farmers or ranchers and socially disadvantaged farmers or ranchers; and
(II) disposing of real property in inventory.
(ii) Notification
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 beginning farmers or ranchers or socially disadvantaged farmers or ranchers or the disposing of real property in inventory.
(d) Easements; condemnations
With respect to any real property administered under this chapter, the Secretary is authorized to grant or sell easements or rights-of-way for roads, utilities, and other appurtenances not inconsistent with the public interest. With respect to any rights-of-way over land on which the United States has a lien administered under this chapter, the Secretary may release said lien upon payment to the United States of adequate consideration, and the interest of the United States arising under any such lien may be acquired for highway purposes by any State or political subdivision thereof in condemnation proceedings under State law by service by certified mail upon the United States attorney for the district, the State Director of the Farmers Home Administration for the State in which the farm is located, and the Attorney General of the United States: Provided, however, That the United States shall not be required to appear, answer, or respond to any notice or writ sooner than ninety days from the time such notice or writ is returnable or purports to be effective, and the taking or vesting of title to the interest of the United States shall not become final under any proceeding, order, or decree until adequate compensation and damages have been finally determined and paid to the United States or into the registry of the court.
(e) Real property located within Indian reservation; conservation practices; adverse effects prohibition
(1)(A)(i) Except as provided in subparagraph (D), if—
(I) the Secretary acquires property under this chapter that is located within an Indian reservation; and
(II) 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 such Indian tribe;
the Secretary shall dispose of or administer the property only as provided for in this subparagraph.
(ii) For purposes of this subparagraph, 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 rights-of-way running through the reservation; trust or restricted land located within the boundaries of a former reservation of a federally recognized Indian tribe in the State of Oklahoma; or all Indian allotments the Indian titles to which have not been extinguished if such allotments are subject to the jurisdiction of a federally recognized Indian tribe.
(iii) 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 clause (iv) by 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 such Indian tribe under clause (iv), in the following order:
(I) to an Indian member of the Indian tribe that has jurisdiction over the reservation within which the real property is located;
(II) to an Indian corporate entity;
(III) to such Indian tribe.
(iv) The governing body of any Indian tribe having jurisdiction over an Indian reservation may revise the order of priority provided in clause (iii) under which lands located within such reservation shall be offered for purchase or lease by the Secretary under clause (iii) and may restrict the eligibility for such purchase or lease to—
(I) persons who are members of such Indian tribe,
(II) Indian corporate entities that are authorized by such Indian tribe to lease or purchase lands within the boundaries of such reservation, or
(III) such Indian tribe itself.
(v) If real property described in clause (i) is not purchased or leased under clause (iii) 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 such 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 those 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—
(I) the expiration of the 4-year period beginning on the date on which the real property is so transferred, or
(II) such time as the lands are transferred into trust pursuant to clause (viii).
(vi) At any time any real property is transferred to the Secretary of the Interior under clause (v), the Secretary of Agriculture shall be deemed to have no further responsibility under this Act for collection of any amounts with regard to the farm program loan which had been secured by such real property, nor with regard to any lien arising out of such loan transaction, nor for repayments of any amount with regard to such loan transactions or liens to the Treasury of the United States, and the Secretary of the Interior shall be deemed to have succeeded to all right, title and interest of the Secretary of Agriculture in such 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, those amounts provided in clause (vii).
(vii) After the payment of any taxes which are required to be paid under clause (v), all remaining rental income derived from the lease of the real property transferred to the Secretary of the Interior under clause (v), and all other income generated from the real property transferred to the Secretary of the Interior under clause (v), shall be deposited as miscellaneous receipts in the Treasury of the United States until the amount deposited is equal to the lesser of—
(I) the amount of the outstanding lien of the United States against such real property, as of the date the real property was acquired by the Secretary;
(II) the fair market value of the real property, as of the date of the transfer to the Secretary of the Interior; or
(III) the capitalized value of the real property, as of the date of the transfer to the Secretary of the Interior.
(viii) When the total amount that is required to be deposited under clause (vii) 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.
(ix) Notwithstanding any other clause of this subparagraph, the Indian tribe having jurisdiction over the Indian reservation within which the real property described in clause (i) is located may, at any time after the real property has been transferred to the Secretary of the Interior under clause (v), offer to pay the remaining amount on the lien, or the fair market value of the real property, whichever is less. Upon payment of such amount, title to such real property shall be held by the United States in trust for the tribe and such trust or restricted lands that have been acquired by the Secretary under foreclosure or voluntary transfer under a loan made or insured under this chapter and transferred to an Indian person, entity, or tribe under the provisions of this subparagraph shall be deemed to have never lost trust or restricted status.
(x) This subparagraph shall apply to all lands in the land inventory established under this chapter (as of November 28, 1990) that were (immediately prior to November 28, 1990) owned by an Indian borrower-owner described in clause (i) and that are situated within an Indian reservation (as defined in clause (ii)), regardless of the date of foreclosure or acquisition by the Secretary. The Secretary shall afford an opportunity to a tribal member, an Indian corporate entity, or the tribe to purchase or lease the real property as provided in clause (iii). If the right is not exercised or no expression of intent to exercise such 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 clause (v).
(B) The rights provided in this subsection shall be in addition to any such right of first refusal under the law of the State in which the property is located.
(C) As used in this paragraph, the term "borrower-owner" means—
(i) a borrower from whom the Secretary acquired real farm or ranch property (including the principal residence of the borrower) used to secure any loan made to the borrower under this chapter; or
(ii) in any case in which an owner of property pledged the property to secure the loan and the owner is different than the borrower, the owner.
(D)(i) If—
(I) the real property described in subparagraph (A)(i) is located within an Indian reservation;
(II) 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;
(III) the borrower-owner has obtained a loan made, insured, or guaranteed under this chapter; and
(IV) the borrower-owner and the Secretary have exhausted all of the procedures provided for in this chapter to permit a borrower-owner to retain title to the real property, such that it is necessary for the borrower-owner to relinquish title,
the Secretary shall dispose of or administer the property only as provided in subparagraph (A), as modified by this subparagraph.
(ii) The Secretary shall provide the borrower-owner of real property that is described in clause (i) with written notice of—
(I) the right of the borrower-owner to voluntarily convey the real property to the Secretary; and
(II) the fact that real property so conveyed will be placed in the inventory of the Secretary.
(iii) The Secretary shall provide the borrower-owner of the real property with written notice of the rights and protections provided under this chapter 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—
(I) the provisions of subparagraph (A), this subparagraph, and subsection (g)(6); 1
(II) if the borrower-owner does not voluntarily convey the real property to the Secretary, that—
(aa) the Secretary may foreclose on the property;
(bb) in the event of foreclosure, the property will be offered for sale;
(cc) the Secretary must 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;
(dd) the property may be purchased by another party; and
(ee) 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 chapter; and
(III) 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 those provided the borrower-owner under this chapter.
(iv)(I) Except as provided in subclause (II), the Secretary shall accept the voluntary conveyance of real property described in clause (i).
(II) If a hazardous substance (as defined in
(v)
(I)
(aa) 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
(bb) 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 the assignment.
(II)
(aa) the sale;
(bb) the fair market value of the property; and
(cc) the requirements of this subparagraph.
(III)
(aa) the Secretary shall not foreclose the loan because of any default that occurred prior to the date of the assumption;
(bb) 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
(cc) the loan shall be treated as though the loan was made under
(vi)(I) Except as provided in subclause (II), at a foreclosure sale of real property described in clause (i), the Secretary shall offer a bid for the property that is equal to the higher of—
(aa) the fair market value of the property; or
(bb) the outstanding principal and interest of the loan.
(II) If a hazardous substance (as defined in
(2) The Secretary shall not offer for sale or sell any such farmland if the placing of such farmland on the market will have a detrimental effect on the value of farmland in the area.
(3)(A) The Secretary may sell farmland administered under this chapter 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 such land.
(B) The Secretary may subsequently sell any contract entered into to carry out subparagraph (A).
(4) In the case of farmland administered under this chapter that is highly erodible land (as defined in
(5) Notwithstanding any other provisions of law, compliance by the Secretary with this subsection shall not cause any acreage allotment, marketing quota, or acreage base assigned to such property to lapse, terminate, be reduced, or otherwise be adversely affected.
(6) In the event of any conflict 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, such provision of State law shall prevail.
(f) Normal security income
(1) As used in this subsection, the term "normal income security" means all security not considered basic security, including crops, livestock, poultry products, Agricultural Stabilization and Conservation Service payments and Commodity Credit Corporation payments, and other property covered by Farmers Home Administration liens that is sold in conjunction with the operation of a farm or other business, but shall 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 is the basic security for a Farmers Home Administration farmer program loan.
(2) The Secretary shall release from the normal income security provided for such loan an amount sufficient to pay for the essential household and farm operating expenses of the borrower, until such time as the Secretary accelerates such loan.
(3) A borrower whose account was accelerated on or after November 1, 1985, and on or before May 7, 1987, but not thereafter foreclosed on or liquidated, shall be entitled to the release of security income for a period of 12 months, to pay the essential household and farm operating expenses of such borrower in an amount not to exceed $18,000 over 12 months, if such borrower—
(A) as of October 30, 1987, continued to be actively engaged in the farming operations for which the Secretary had made the farmer program loan; and
(B) as of the deadline for responding to the notice provided for under paragraph (5), requests restructuring of such loans pursuant to
(4) The county committee in the county in which borrower's land is located shall determine whether the borrower has complied with the requirements of paragraph (3)(A).
(5)(A) Within 45 days after January 6, 1988, the Secretary shall provide to the borrowers described in paragraph (3) notice by certified mail of the right of such borrowers to apply for the benefits under such paragraph.
(B) Releases under such paragraph shall be made to qualified borrowers who have responded to the notice within 30 days after receipt.
(C) Within 12 months after a borrower has requested restructuring under
(6) If a borrower is required to plan for or to report on how proceeds from the sale of collateral property will be used, the Secretary shall—
(A) notify the borrower of such requirement; and
(B) notify the borrower of the right to the release of funds under this section and the means by which a request for the funds may be made.
(7) The Secretary shall issue regulations consistent with this section that—
(A) ensure the release of funds to each borrower; and
(B) establish guidelines for releases under paragraph (3), including a list of expenditures for which funds will normally be released.
(g) Easements on inventoried property
(1) In general
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 wetlands or converted wetlands that exist on inventoried property.
(2) Limitation
The Secretary shall not establish a wetland conservation easement on an inventoried property that—
(A) was cropland on the date the property entered the inventory of the Secretary; or
(B) was used for farming at any time during the period beginning on the date 5 years before the property entered the inventory of the Secretary and ending on the date the property entered the inventory of the Secretary.
(3) Notification
The Secretary shall provide prior written notification to a borrower considering preservation loan servicing that a wetlands conservation easement may be placed on land for which the borrower is negotiating a lease option.
(4) Appraised value
The appraised value of the farm shall reflect the value of the land due to the placement of wetland conservation easements.
(
References in Text
This chapter, referred to in text, was in the original "this title", meaning title III of
This Act, referred to in subsec. (e)(1)(A)(vi), refers to the Agricultural Act of 1961,
Subsection (g)(6) of this section, referred to in subsec. (e)(1)(D)(iii)(I), was redesignated subsection (g)(3) of this section by
Codification
In subsec. (c)(4), "Chapters 1 to 11 of title 40 and division C (except sections 3302, 3307(e), 3501(b), 3509, 3906, 4710, and 4711) of subtitle I of title 41" substituted for "The Federal Property and Administrative Services Act of 1949 (
Amendments
2008—Subsec. (c)(1)(B).
Subsec. (c)(1)(C).
Subsec. (c)(5)(B)(i).
Subsec. (c)(5)(B)(ii).
Subsec. (c)(6)(A).
Subsec. (c)(6)(C).
2002—Subsec. (c)(1)(B)(i).
Subsec. (c)(1)(B)(iv).
Subsec. (c)(1)(C).
Subsec. (c)(2).
"(A)
"(B)
1996—Subsec. (b).
Subsec. (c).
Subsec. (e)(1)(A).
Subsec. (e)(1)(B).
Subsec. (e)(1)(C).
Subsec. (e)(1)(D).
"(I) the sale;
"(II) the fair market value of the property; and
"(III) the requirements of this subparagraph."
Former subpar. (D) redesignated (A).
Subsec. (e)(1)(E) to (G).
Subsec. (e)(3).
Subsec. (e)(4).
Subsec. (e)(5).
"(5)(A) If the Secretary determines that farmland administered under this chapter is not suitable for sale or lease to persons eligible for a loan made or insured under subchapter I of this chapter because such farmland is in a tract or tracts that the Secretary determines to be larger than that necessary for such eligible persons, the Secretary shall, to the greatest extent practicable, subdivide such land into tracts suitable for sale under subsection (c) of this section. Such land shall be subdivided into parcels of land the shape and size of which are suitable for farming, the value of which shall not exceed the individual loan limits as prescribed under
"(B) The Secretary shall dispose of such subdivided farmland in accordance with this subsection."
Subsec. (e)(6).
"(A) publish an announcement of the availability of such farmland in at least one newspaper that is widely circulated in the county in which the farmland is located;
"(B) post an announcement of the availability of such farmland in a prominent place in the local office of the Farmers Home Administration that serves the county in which the farmland is located; and
"(C) provide written notice reasonably calculated to inform the immediate previous owner or immediate previous family-size farm operator of such farmland, of the availability of such farmland."
Subsec. (e)(7), (8).
Subsec. (e)(9).
Subsec. (e)(10).
Subsec. (g).
Subsec. (g)(1).
Subsec. (g)(2).
Subsec. (g)(3).
"(A) not establish the wetland conservation easements with respect to wetlands that were converted prior to December 23, 1985, and that have been in cropland use, as determined by the Secretary, in excess of 10 percent of the existing cropland available for production of agricultural commodities on the particular parcel of inventoried property;
"(B) not establish the wetland conservation easements with respect to wetlands that have been frequently planted to agricultural commodities and wetlands described in subparagraph (A), in excess of 20 percent of the existing cropland available for production of agricultural commodities on the particular parcel of inventoried property;
"(C) ensure that the buffer area adjacent to the wetland is generally not more than 100 feet in average width; and
"(D) ensure that access to other portions of the property for farming and other uses is provided."
Subsec. (g)(4).
Subsec. (g)(5).
"(A) establish wetland conservation easements on wetland that was converted prior to December 23, 1985, in a quantity that is less than 10 percent of the existing croplands available for production of agricultural commodities on the particular parcel; and
"(B) if the reduction provided in subparagraph (A) is not applicable, or is not sufficient to ensure that the particular parcel would be a marketable agricultural production unit, amend the wetland conservation easements established on the wetlands that have been frequently planted to agricultural commodities to permit the production of agricultural commodities (consistent with title XII of the Food Security Act of 1985) on the wetlands, to the extent necessary to maintain the parcel as a marketable agricultural production unit."
Subsec. (g)(6), (7).
Subsec. (g)(8).
1992—Subsec. (c)(1).
Subsec. (e)(1)(A)(i).
Subsec. (e)(1)(D)(i).
Subsec. (e)(1)(G).
1991—Subsec. (e)(1)(A)(i).
Subsec. (e)(1)(F).
1990—Subsec. (a).
Subsec. (c)(1).
Subsec. (c)(2)(A), (B).
Subsec. (c)(2)(B)(ii).
Subsec. (c)(2)(B)(iii).
Subsec. (c)(2)(B)(iv).
Subsec. (e)(1)(A)(i).
Subsec. (e)(1)(A)(iv).
Subsec. (e)(1)(C)(i).
Subsec. (e)(1)(C)(iv), (v).
Subsec. (e)(1)(D)(x).
Subsec. (e)(4)(B).
Subsec. (e)(4)(C).
Subsec. (g).
1988—Subsec. (c).
Subsec. (e)(1).
"(A) Sale of such farmland to operators (as of the time immediately before such sale) of not larger than family-size farms.
"(B) Lease of such farmland to operators (as of the time immediately before such lease is entered into) of not larger than family-size farms."
Subsec. (e)(3).
Subsec. (e)(5)(A).
Subsec. (e)(6)(C).
Subsec. (e)(9), (10).
Subsec. (f).
"(1) As used in this subsection, the term 'normal income security' has the same meaning given such term in section 1962.17(b) of title 7, Code of Federal Regulations (as of January 1, 1985).
"(2) Until such time as the Secretary accelerates a loan made or insured under this chapter, the Secretary shall release from the normal income security provided for such loan an amount sufficient to pay the essential household and farm operating expenses of the borrower, as determined by the Secretary."
1985—Subsec. (b).
Subsec. (c).
Subsec. (e).
Subsec. (f).
1972—Subsec. (c).
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1996 Amendment
Amendment by section 638 of
Effective Date of 1992 Amendment
Effective Date of 1990 Amendment
Amendment by section 1816 of
Effective Date of 1985 Amendment
Completion of Sales of Farmers Home Administration Inventory Farms
Farm Ownership Outreach Program to Socially Disadvantaged Individuals
"(a)
"(1) informing persons eligible for assistance under any other provision of this Act [see Short Title of 1988 Amendment note set out under
"(A) the possiblity [sic] of acquiring such inventory farmland; and
"(B) various farm ownership loan programs; and
"(2) providing technical assistance to such persons in the acquisition of such inventory farmland.
"(b)
1 See References in Text note below.
§1986. Conflicts of interests
(a) Acceptance of fees, commissions, gifts, or other considerations prohibited
No officer, attorney, or other employee of the Secretary shall, directly or indirectly, be the beneficiary of or receive any fee, commission, gift, or other consideration for or in connection with any transaction or business under this chapter other than such salary, fee, or other compensation as he may receive as such officer, attorney, or employee.
(b) Acquisition of interest in land by certain officers or employees of Department of Agriculture prohibited; 3-year period
Except as otherwise provided in this subsection, no officer or employee of the Department of Agriculture who acts on or reviews an application made by any person under this chapter for a loan to purchase land may acquire, directly or indirectly, any interest in such land for a period of three years after the date on which such action is taken or such review is made. This prohibition shall not apply to a former member of a county committee upon a determination by the Secretary, prior to the acquisition of such interest, that such former member acted in good faith when acting on or reviewing such application.
(c) Certifications on loans to family members prohibited
No member of a county committee shall knowingly make or join in making any certification with respect to a loan to purchase any land in which he or any person related to him within the second degree of consanguinity or affinity has or may acquire any interest or with respect to any applicant related to him within the second degree of consanguinity or affinity.
(d) Penalties
Any persons violating any provision of this section shall, upon conviction thereof, be punished by a fine of not more than $2,000 or imprisonment for not more than two years, or both.
(
References in Text
This chapter, referred to in subsecs. (a) and (b), was in the original "this title", meaning title III of
Amendments
2002—Subsec. (b).
1984—
§1987. Debt adjustment and credit counseling; "summary period" defined; loan summary statements
(a) The Secretary may provide voluntary debt adjustment assistance between farmers and their creditors and may cooperate with State, territorial, and local agencies and committees engaged in such debt adjustment, and may give credit counseling.
(b)(1) As used in this subsection, the term "summary period" means—
(A) the period beginning on December 23, 1985, and ending on the date on which the first loan summary statement is issued after December 23, 1985; or
(B) the period beginning on the date of issuance of the preceding loan summary statement and ending on the date of issuance of the current loan summary statement.
(2) On the request of a borrower of a loan made or insured (but not guaranteed) under this chapter, the Secretary shall issue to such borrower a loan summary statement that reflects the account activity during the summary period for each loan made or insured under this chapter to such borrower, including—
(A) the outstanding amount of principal due on each such loan at the beginning of the summary period;
(B) the interest rate charged on each such loan;
(C) the amount of payments made on and their application to each such loan during the summary period and an explanation of the basis for the application of such payments;
(D) the amount of principal and interest due on each such loan at the end of the summary period;
(E) the total amount of unpaid principal and interest on all such loans at the end of the summary period;
(F) any delinquency in the repayment of any such loan;
(G) a schedule of the amount and date of payments due on each such loan; and
(H) the procedure the borrower may use to obtain more information concerning the status of such loans.
(
References in Text
This chapter, referred to in subsec. (b)(2), was in the original "this title", meaning title III of
Amendments
1985—
§1988. Appropriations
(a) Authorization
There is authorized to be appropriated to the Secretary such sums as the Congress may from time to time determine to be necessary to enable the Secretary to carry out the purposes of this chapter and for the administration of assets transferred to the Farmers Home Administration or the Rural Development Administration.
(b) Sale by lender and any holder of guaranteed portion of loan pursuant to regulations governing such sales; limitations; issuance of pool certificates representing ownership of guaranteed portion of guaranteed loan; terms and conditions, etc.; reporting requirements
(1)(A) The guaranteed portion of any loan made under this chapter may be sold by the lender, and by any subsequent holder, in accordance with regulations governing such sales as the Secretary shall establish, subject to the following limitations:
(i) All fees due the Secretary with respect to a guaranteed loan are to be paid in full before any sale.
(ii) The loan is to have been fully disbursed to the borrower before the sale.
(B) After a loan is sold in the secondary market, the lender shall remain obligated under its guarantee agreement with the Secretary, and shall continue to service the loan in accordance with the terms and conditions of such agreement.
(C) The Secretary shall develop such procedures as are necessary for the facilitation, administration, and promotion of secondary market operations, and for determining the increase of farmers' access to capital at reasonable rates and terms as a result of secondary market operations.
(D) This subsection shall not be interpreted to impede or extinguish the right of the borrower or the successor in interest to such borrower to prepay (in whole or in part) any loan made under this chapter, or to impede or extinguish the rights of any party under any provision of this chapter.
(2)(A) The Secretary may, directly or through a market maker approved by the Secretary, issue pool certificates representing ownership of part or all of the guaranteed portion of any loan guaranteed by the Secretary under this chapter. Such certificates shall be based on and backed by a pool established or approved by the Secretary and composed solely of the entire guaranteed portion of such loans.
(B) The Secretary may, on such terms and conditions as the Secretary deems appropriate, guarantee the timely payment of the principal and interest on pool certificates issued on behalf of the Secretary by approved market makers for purposes of this subsection. Such guarantee shall be limited to the extent of principal and interest on the guaranteed portions of loans that compose the pool. If a loan in such pool is prepaid, either voluntarily or by reason of default, the guarantee of timely payment of principal and interest on the pool certificates shall be reduced in proportion to the amount of principal and interest such prepaid loan represents in the pool. Interest on prepaid or defaulted loans shall accrue and be guaranteed by the Secretary only through the date of payment on the guarantee. During the term of the pool certificate, the certificate may be called for redemption due to prepayment or default of all loans constituting the pool.
(C) The full faith and credit of the United States is pledged to the payment of all amounts that may be required to be paid under any guarantee of such pool certificates issued by approved market makers under this subsection. The Secretary may expend amounts in the Agricultural Credit Insurance Fund to make payments on such guarantees.
(D) The Secretary shall not collect any fee for any guarantee under this subsection. The preceding sentence shall not preclude the Secretary from collecting a fee for the functions described in paragraph (3).
(E) Within 30 days after a borrower of a guaranteed loan is in default of any principal or interest payment due for 60 days or more, the Secretary shall—
(i) purchase the pool certificates representing ownership of the guaranteed portion of the loan; and
(ii) pay the registered holder of the certificates an amount equal to the guaranteed portion of the loan represented by the certificate.
(F)(i) If the Secretary pays a claim under a guarantee issued under this subsection, the claim shall be subrogated fully to the rights satisfied by such payment, as may be provided by the Secretary.
(ii) No State or local law, and no Federal law, shall preclude or limit the exercise by the Secretary of the Secretary's ownership rights in the portions of loans constituting the pool against which the certificates are issued.
(3) On the adoption of final rules and regulations, the Secretary shall do the following:
(A) Provide for the central collection of registration information from all participating market makers for all loans and pool certificates sold under paragraphs (1) and (2). Such information shall include, with respect to each original sale and any subsequent sale, identification of the interest rate paid by the borrower to the lender, the lender's servicing fee, whether interest on the loan is at a fixed or variable rate, identification of each purchaser of a pool certificate, the interest rate paid on the certificate, and such other information as the Secretary deems appropriate.
(B) Before any sale, require the seller to disclose to each prospective purchaser of the portion of a loan guaranteed under this chapter and to each prospective purchaser of a pool certificate issued under paragraph (2), information on the terms, conditions, and yield of such instrument. As used in this subparagraph, if the instrument being sold is a loan, the term "seller" does not include (i) the person who made the loan or (ii) any person who sells three or fewer guaranteed loans per year.
(C) Provide for adequate custody of any pooled guaranteed loans.
(D) Take such actions as are necessary, in restructuring pools of the guaranteed portion of loans, to minimize the estimated costs of paying claims under guarantees issued under this subsection.
(E) Require each market maker—
(i) to service all pools formed, and participations sold, by the market maker; and
(ii) to provide the Secretary with information relating to the collection and disbursement of all periodic payments, prepayments, and default funds from lenders, to or from the reserve fund that the Secretary shall establish to enable the timely payment guarantee to be self-funding, and from all beneficial holders.
(F) Regulate market makers in pool certificates sold under this subsection.
(4) The Secretary may contract for goods and services to be used for the purposes of this subsection without regard to the provisions of titles 5, 40, and 41, and any regulations issued thereunder.
(
References in Text
This chapter, referred to in text, was in the original "this title", meaning title III of
Amendments
1998—Subsec. (b)(4), (5).
1996—Subsecs. (b) to (f).
1990—Subsec. (a).
1988—Subsec. (f)(5).
Subsec. (f).
1966—Subsec. (c).
Effective Date of 1988 Amendment
Amendment by
Regulations
Pool Certificates Not To Be Issued Until Final Regulations Take Effect
Loans to Indians
Authority of the Secretary of Agriculture to make loans to Indian tribes and tribal corporations to acquire land within reservations, see
§1989. Rules and regulations
(a) In general
The Secretary is authorized to make such rules and regulations, prescribe the terms and conditions for making or insuring loans, security instruments and agreements, except as otherwise specified herein, and make such delegations of authority as he deems necessary to carry out this chapter.
(b) Debt service margin requirements
Notwithstanding subsection (a), in providing farmer program loan guarantees under this chapter, the Secretary shall consider the income of the borrower adequate if the income is equal to or greater than the income necessary—
(1) to make principal and interest payments on all debt obligations of the borrower, in a timely manner;
(2) to cover the necessary living expenses of the family of the borrower; and
(3) to pay all other obligations and expenses of the borrower not financed through debt obligations referred to in paragraph (1).
(c) Certified Lenders Program
(1) In general
The Secretary shall establish a program under which the Secretary shall guarantee loans for any purpose specified in subchapter II that are made by lending institutions certified by the Secretary.
(2) Certification requirements
The Secretary shall certify a lending institution that meets such criteria as the Secretary may prescribe in regulations, including the ability of the institution to properly make, service, and liquidate the loans of the institution.
(3) Condition of certification
As a condition of the certification, the Secretary shall require the institution to undertake to service the loans guaranteed by the Secretary under this subsection, using standards that are not less stringent than generally accepted banking standards concerning loan servicing employed by prudent commercial or cooperative lenders. The Secretary shall, at least annually, monitor the performance of each certified lender to ensure that the conditions of the certification are being met.
(4) Effect of certification
Notwithstanding any other provision of law:
(A) The Secretary shall guarantee 80 percent of a loan made under this subsection by a certified lending institution as described in paragraph (1), subject to county committee certification that the borrower of the loan meets the eligibility requirements and such other criteria as may be applicable to loans guaranteed by the Secretary under other provisions of this chapter.
(B) With respect to loans to be guaranteed by the Secretary under this subsection, the Secretary shall permit certified lending institutions to make appropriate certifications (as provided by regulations issued by the Secretary)—
(i) relating to issues such as creditworthiness, repayment ability, adequacy of collateral, and feasibility of farm operation; and
(ii) that the borrower is in compliance with all requirements of law, including regulations issued by the Secretary.
(C) The Secretary shall approve or disapprove a guarantee not later than 14 calendar days after the date that the lending institution applied to the Secretary for the guarantee. If the Secretary rejects the loan application within the 14-day period, the Secretary shall state, in writing, all of the reasons the application was rejected.
(5) Relationship to other requirements
Neither this subsection nor subsection (d) shall affect the responsibility of the Secretary to certify eligibility, review financial information, and otherwise assess an application.
(d) Preferred Certified Lenders Program
(1) In general
Commencing not later than two years after October 28, 1992, the Secretary shall establish a Preferred Certified Lenders Program for lenders who establish their—
(A) knowledge of, and experience under, the program established under subsection (c);
(B) knowledge of the regulations concerning the guaranteed loan program; and
(C) proficiency related to the certified lender program requirements.
The Secretary shall certify any lending institution as a Preferred Certified Lender that meets such criteria as the Secretary may prescribe by regulation.
(2) Revocation of designation
The designation of a lender as a Preferred Certified Lender shall be revoked at any time that the Secretary determines that such lender is not adhering to the rules and regulations applicable to the program or if the loss experiences of a Preferred Certified Lender are excessive as compared to other Preferred Certified Lenders, except that such suspension or revocation shall not affect any outstanding guarantee.
(3) Condition of certification
As a condition of such preferred certification, the Secretary shall require the institution to undertake to service the loans guaranteed by the Secretary under this subsection using generally accepted banking standards concerning loan servicing employed by prudent commercial or cooperative lenders. The Secretary shall, at least annually, monitor the performance of each Preferred Certified Lender to ensure that the conditions of such certification are being met.
(4) Effect of preferred lender certification
Notwithstanding any other provision of law, the Secretary shall—
(A) guarantee 80 percent of an approved loan made by a certified lending institution as described in this subsection, subject to county committee certification that the borrower meets the eligibility requirements or such other criteria as may be applicable to loans guaranteed by the Secretary under other provisions of this chapter;
(B) permit certified lending institutions to make all decisions, with respect to loans to be guaranteed by the Secretary under this subsection relating to credit worthiness, the closing, monitoring, collection and liquidation of loans, and to accept appropriate certifications, as provided by regulations issued by the Secretary, that the borrower is in compliance with all requirements of law or regulations promulgated by the Secretary; and
(C) be deemed to have guaranteed 80 percent of a loan made by a preferred certified lending institution as described in paragraph (1), if the Secretary fails to approve or reject the application of such institution within 14 calendar days after the date that the lending institution presented the application to the Secretary. If the Secretary rejects the application within the 14-day period, the Secretary shall state, in writing, the reasons the application was rejected.
(e) Administration of Certified Lenders and Preferred Certified Lenders programs
The Secretary may administer the loan guarantee programs under subsections (c) and (d) through central offices established in States or in multi-State areas.
(
References in Text
This chapter, referred to in text, was in the original "this title", meaning title III of
Amendments
2018—Subsec. (d)(3).
2002—Subsec. (e).
1999—Subsec. (b)(3).
1992—
Regulations
"(a)
"(b)
Study and Report to Congress Before Issuance of Certain Final Regulations
Availability of Funds for Continuing Assistance to Delinquent Borrowers; Prohibition on Use of Funds
"Hereafter, funds appropriated or available to the Farmers Home Administration under this or any other Act to make or to service farm loans shall be available for continuing assistance to delinquent borrowers on the basis of the policies contained in Farmers Home Administration Announcement Number 1113–1960, dated November 30, 1984.
"Hereafter, none of the funds appropriated or made available by this or any other Act, or otherwise made available to the Secretary of Agriculture or the Farmers Home Administration, may be used to implement section 1944.16(c)(1) of title 7, Code of Federal Regulations, as published in 52 Federal Register 11983 (April 14, 1987) or any other regulation that would have the same effect as such regulation."
Coordinated Financial Statements; Use of Submission Requirement Prohibited
§1990. Transfer of lands to Secretary
The President may at any time in his discretion transfer to the Secretary any right, interest, or title held by the United States in any lands acquired in the program of national defense and no longer needed therefor, which the President shall find suitable for the purposes of this chapter, and the Secretary shall dispose of such lands in the manner and subject to the terms and conditions of the chapter.
(
References in Text
This chapter, referred to in text, was in the original "this title", meaning title III of
Delegation of Functions
Authority of President under this section in his discretion to transfer to Secretary of Agriculture any right, interest or title held by United States in any lands acquired in program of national defense and no longer needed for that program, and to determine suitability of lands to be transferred, for purposes referred to in this section, delegated to Administrator of General Services, provided, that exercise by Administrator of authority delegated to him herein shall require concurrence of Secretary of Defense as to absence of further need of lands for national defense program, see section 1(15) of Ex. Ord. No. 11609, July 22, 1971, 36 F.R. 13747, set out as a note under
§1990a. Refinancing of certain rural hospital debt
Assistance under
(
Codification
Another section 342 of
§1991. Definitions
(a) As used in this chapter:
(1) The term "farmer" includes a person who is engaged in, or who, with assistance afforded under this chapter, intends to engage in, fish farming.
(2) The term "farming" shall be deemed to include fish farming.
(3) The term "owner-operator" shall include in the State of Hawaii the lessee-operator of real property in any case in which the Secretary determines that such real property cannot be acquired in fee simple by such lessee-operator, that adequate security is provided for the loan with respect to such real property for which such lessee-operator applies under this chapter, and that there is a reasonable probability of accomplishing the objectives and repayment of such loan.
(4) The word "insure" as used in this chapter includes guarantee, which means to guarantee the payment of a loan originated, held, and serviced by a private financial agency or other lender approved by the Secretary.
(5) The term "contract of insurance" includes a contract of guarantee.
(6) The terms "United States" and "State" shall include each of the several States, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and, to the extent the Secretary determines it to be feasible and appropriate, the Trust Territory of the Pacific Islands.
(7) The term "joint operation" means a joint farming operation in which two or more farmers work together sharing equally or unequally land, labor, equipment, expenses, and income.
(8) The term "beginning farmer or rancher" means such term as defined by the Secretary.
(9) The term "direct loan" means a loan made or insured from funds in the account created by
(10) The term "farmer program loan" means a farm ownership loan (FO) under
(11) The term "qualified beginning farmer or rancher" means an applicant, regardless of whether the applicant is participating in a program under
(A) who is eligible for assistance under this chapter;
(B) who has not operated a farm or ranch, or who has operated a farm or ranch for not more than 10 years;
(C) in the case of a cooperative, corporation, partnership, joint operation, or such other legal entity as the Secretary considers appropriate, who has members, stockholders, partners, joint operator,1 or owners who are all related to one another by blood or marriage;
(D)(i) in the case of an owner and operator of a farm or ranch, who—
(I) in the case of a loan made to an individual, individually or with the immediate family of the applicant—
(aa) materially and substantially participates in the operation of the farm or ranch; and
(bb) provides substantial day-to-day labor and management of the farm or ranch, consistent with the practices in the State or county in which the farm or ranch is located; or
(II)(aa) in the case of a loan made to a cooperative, corporation, partnership, joint operation, or such other legal entity as the Secretary considers appropriate, has members, stockholders, partners, joint operators, or owners, materially and substantially participate in the operation of the farm or ranch; and
(bb) in the case of a loan made to a cooperative, corporation, partnership, joint operation, or other such legal entity as the Secretary considers appropriate, has members, stockholders, partners, or joint operators, all of whom are qualified beginning farmers or ranchers; and
(ii) in the case of an applicant seeking to own and operate a farm or ranch, who—
(I) in the case of a loan made to an individual, individually or with the immediate family of the applicant, will—
(aa) materially and substantially participate in the operation of the farm or ranch; and
(bb) provide substantial day-to-day labor and management of the farm or ranch, consistent with the practices in the State or county in which the farm or ranch is located; or
(II)(aa) in the case of a loan made to a cooperative, corporation, partnership, joint operation, or such other legal entity as the Secretary considers appropriate, will have members, stockholders, partners, joint operators, or owners, materially and substantially participate in the operation of the farm or ranch; and
(bb) in the case of a loan made to a cooperative, corporation, partnership, joint operation, or other such legal entity as the Secretary considers appropriate, has members, stockholders, partners, or joint operators, all of whom are qualified beginning farmers or ranchers;
(E) who agrees to participate in such loan assessment, borrower training, and financial management programs as the Secretary may require;
(F) who does not own land or who, directly or through interests in family farm corporations, owns land, the aggregate acreage of which does not exceed 30 percent of the average acreage of the farms or ranches, as the case may be, in the county in which the farm or ranch operations of the applicant are located, as reported in the most recent census of agriculture, except that this subparagraph shall not apply to a loan made or guaranteed under subchapter II; and
(G) who demonstrates that the available resources of the applicant and spouse (if any) of the applicant are not sufficient to enable the applicant to continue farming or ranching on a viable scale.
(12)
(A)
(i) writing down or writing off a loan under
(ii) compromising, adjusting, reducing, or charging-off a debt or claim under
(iii) paying a loss on a guaranteed loan under
(iv) discharging a debt as a result of bankruptcy.
(B)
(i) consolidation, rescheduling, reamortization, or deferral of a loan; or
(ii) any write-down provided as part of a resolution of a discrimination complaint against the Secretary.
(13)
(A)
(i) a city or town that has a population of greater than 50,000 inhabitants; and
(ii) any urbanized area contiguous and adjacent to a city or town described in clause (i).
(B)
(C)
(D)
(i)
(I) an urbanized area described in subparagraphs (A)(ii) and (F) that—
(aa) has 2 points on its boundary that are at least 40 miles apart; and
(bb) is not contiguous or adjacent to a city or town that has a population of greater than 150,000 inhabitants or an urbanized area of such city or town; and
(II) an area within an urbanized area described in subparagraphs (A)(ii) and (F) that is within ¼-mile of a rural area described in subparagraph (A).
(ii)
(iii)
(I) not delegate the authority to carry out this subparagraph;
(II) consult with the applicable rural development State or regional director of the Department of Agriculture and the governor of the respective State;
(III) provide to the petitioner an opportunity to appeal to the Under Secretary a determination made under this subparagraph;
(IV) release to the public notice of a petition filed or initiative of the Under Secretary under this subparagraph not later than 30 days after receipt of the petition or the commencement of the initiative, as appropriate;
(V) make a determination under this subparagraph not less than 15 days, and not more than 60 days, after the release of the notice under subclause (IV);
(VI) submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate an annual report on actions taken to carry out this subparagraph; and
(VII) terminate a determination under this subparagraph that part of an area is a rural area on the date that data is available for the next decennial census conducted under
(E)
(F)
(i)
(I) any area that—
(aa) is a collection of census blocks that are contiguous to each other;
(bb) has a housing density that the Secretary estimates is greater than 200 housing units per square mile; and
(cc) is contiguous or adjacent to an existing boundary of a rural area; and
(II) any urbanized area contiguous and adjacent to a city or town described in subparagraph (A)(i).
(ii)
(I) an area described in clause (i)(I) not to be a rural area for purposes of subparagraphs (A) and (C); and
(II) an area described in clause (i)(II) not to be a rural area for purposes of subparagraph (C).
(iii)
(G)
(H)
(I)
(b) As used in sections 1927(d), 1981d, 1985(e) and (f), 1988(b), 2000(b) and (c), 2001, and 2005 of this title:
(1) The term "borrower" means any farm borrower who has outstanding obligations to the Secretary under any farmer program loan, without regard to whether the loan has been accelerated, but does not include any farm borrower all of whose loans and accounts have been foreclosed on or liquidated, voluntarily or otherwise.
(2) The term "loan service program" means, with respect to a farmer program borrower, a primary loan service program or a preservation loan service program.
(3) The term "primary loan service program" means—
(A) loan consolidation, rescheduling, or reamortization;
(B) interest rate reduction, including the use of the limited resource program;
(C) loan restructuring, including deferral, set aside, or writing down of the principal or accumulated interest charges, or both, of the loan; or
(D) any combination of actions described in subparagraphs (A), (B), and (C).
(4)
(
References in Text
This chapter, referred to in subsec. (a), was in the original "this title", meaning title III of
Section 202 of the Emergency Agricultural Credit Adjustment Act, referred to in subsec. (a)(10), is section 202 of
The Economic Opportunity Act of 1961, referred to in subsec. (a)(10), probably means the Economic Opportunity Act of 1964,
Section 1254 of the Food Security Act of 1985, referred to in subsec. (a)(10), is section 1254 of
Codification
Amendments
2018—Subsec. (a)(11)(C).
Subsec. (a)(13)(A).
Subsec. (a)(13)(B).
Subsec. (a)(13)(C).
Subsec. (a)(13)(H), (I).
Subsec. (b).
2014—Subsec. (a)(11)(C).
Subsec. (a)(11)(D)(i)(II)(aa).
Subsec. (a)(11)(D)(i)(II)(bb).
Subsec. (a)(11)(D)(ii)(II)(aa).
Subsec. (a)(11)(D)(ii)(II)(bb).
Subsec. (a)(11)(F).
2008—Subsec. (a)(13).
2002—Subsec. (a)(11)(F).
Subsec. (a)(12)(B).
Subsec. (a)(13).
1997—Subsec. (a)(11)(F).
1996—Subsec. (a)(10).
Subsec. (a)(11).
Subsec. (a)(11)(F).
Subsec. (a)(12).
Subsec. (b).
Subsec. (b)(4).
"(A) homestead retention as authorized under
"(B) a leaseback or buyback of farmland authorized under
1992—Subsec. (a).
1991—Subsec. (a)(1), (3).
Subsec. (a)(5).
1990—Subsec. (a)(1), (3).
Subsec. (a)(5).
Subsec. (a)(8) to (10).
1988—
1985—
1980—
1978—
1972—
1966—
Effective Date of 2018 Amendment
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1997 Amendment
Effective Date of 1996 Amendment
Amendment by section 640(1) of
Effective Date of 1991 Amendment
Amendment by
Effective and Termination Date of 1966 Amendment
Construction of 1990 Amendment
Termination of Trust Territory of the Pacific Islands
For termination of Trust Territory of the Pacific Islands, see note set out preceding
§1992. Loan limitations
No loan (other than one to a public body or nonprofit association (including Indian tribes on Federal and State reservations or other federally recognized Indian tribal groups) for community facilities or one of a type authorized by
(
References in Text
For statutory changes to
Amendments
1996—
1975—
§1993. Transition to private commercial or other sources of credit
(a) In general
In making or insuring a farm loan under subchapter I or II, 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.
(b) Coordination
In carrying out this section, the Secretary shall integrate and coordinate the transition policy described in subsection (a) with—
(1) the borrower training program established by
(2) the loan assessment process established by
(3) the supervised credit requirement established by
(4) the market placement program established by
(5) other appropriate programs and authorities, as determined by the Secretary.
(
Codification
Prior Provisions
A prior section 1993,
Effective Date
Enactment of this section and repeal of
§1994. Maximum amounts for loans authorized; long-term cost projections
(a) Maximum aggregate principal amounts for loans authorized
Effective October 1, 1979, the aggregate principal amount of loans under the programs authorized under each subchapter of this chapter during each three-year period thereafter shall not exceed such amounts as may be authorized by law after August 4, 1978. There shall be two amounts so established for each of such programs and for any maximum levels provided in appropriation Acts for the programs authorized under this chapter, one against which direct and insured loans shall be charged and the other against which guaranteed loans shall be charged.
(b) Authorization for loans
(1) In general
The Secretary may make or guarantee loans under subchapters I and II from the Agricultural Credit Insurance Fund provided for in
(A) $3,000,000,000 shall be for direct loans, of which—
(i) $1,500,000,000 shall be for farm ownership loans under subchapter I; and
(ii) $1,500,000,000 shall be for operating loans under subchapter II; and
(B) $7,000,000,000 shall be for guaranteed loans, of which—
(i) $3,500,000,000 shall be for farm ownership loans under subchapter I; and
(ii) $3,500,000,000 shall be for operating loans under subchapter II.
(2) Beginning farmers and ranchers
(A) Direct loans
(i) Farm ownership loans
(I) In general
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 and ranchers.
(II) Down payment loans; joint financing arrangements
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
(ii) Operating loans
Of the amounts made available under paragraph (1) for direct operating loans, the Secretary shall reserve for qualified beginning farmers and ranchers—
(I) for each of fiscal years 1996 through 1998, 25 percent;
(II) for fiscal year 1999, 30 percent; and
(III) for each of fiscal years 2008 through 2023, an amount that is not less than 50 percent.
(iii) Funds reserved until September 1
Except as provided in clause (i)(II), funds reserved for qualified beginning farmers or ranchers under this subparagraph for a fiscal year shall be reserved only until September 1 of the fiscal year.
(B) Guaranteed loans
(i) Farm ownership loans
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 and ranchers.
(ii) Operating loans
Of the amounts made available under paragraph (1) for guarantees of operating loans, the Secretary shall reserve 40 percent for qualified beginning farmers and ranchers.
(iii) Funds reserved until April 1
Funds reserved for qualified beginning farmers or ranchers under this subparagraph for a fiscal year shall be reserved only until April 1 of the fiscal year.
(C) Reserved funds for all qualified beginning farmers and ranchers
If a qualified beginning farmer or rancher meets the eligibility criteria for receiving a direct or guaranteed loan under
(3) Transfer for down payment loans
(A) In general
Notwithstanding subsection (a), subject to subparagraph (B)—
(i) 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 and ranchers under the down payment loan program established under
(ii) 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 and ranchers, if sufficient direct farm ownership loan funds are not otherwise available.
(B) Limitation
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.
(4) Transfer for credit sales of farm inventory property
(A) In general
Notwithstanding subsection (a), subject to subparagraphs (B) and (C), beginning on September 1 of each fiscal year, the Secretary may use available funds made available under subchapter III for the fiscal year to fund the credit sale of farm real estate in the inventory of the Secretary.
(B) Supplemental appropriations
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.
(C) Limitation
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.
(5) Use of additional funds for direct operating microloans under certain conditions
(A) In general
If the Secretary determines that the amount needed for a fiscal year for direct operating loans (including microloans) under subchapter II is greater than the aggregate principal amount authorized for that fiscal year by this Act, an appropriations Act, or any other provision of law, the Secretary shall make additional microloans under subchapter II using amounts made available under subparagraph (C).
(B) Notice
Not later than 15 days before the date on which the Secretary uses the authority under subparagraph (A), the Secretary shall submit a notice of the use of that authority to—
(i) the Committee on Appropriations of the House of Representatives;
(ii) the Committee on Appropriations of the Senate;
(iii) the Committee on Agriculture of the House of Representatives; and
(iv) the Committee on Agriculture, Nutrition, and Forestry of the Senate.
(C) Authorization of appropriations
There is authorized to be appropriated to carry out this paragraph $5,000,000 for each of fiscal years 2019 through 2023.
(c) Development of long-term cost projections for loan program authorizations
The Secretary shall develop long-term cost projections for loan program authorizations required under subsection (a) of this section. Each such projection shall include analyses of (1) the long-term costs of the lending levels that the Secretary requests to be authorized under subsection (a) of this section and (2) 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 deems appropriate. Long-term cost projections for the three-year period beginning with fiscal year 1983 and each three-year period thereafter shall be submitted to the House Committee on Agriculture, the House Committee on Appropriations, the Senate Committee on Agriculture, Nutrition, and Forestry, and the Senate Committee on Appropriations at the time the requests for authorizations for those periods are submitted to Congress. Not later than fifteen days after October 13, 1980, the Secretary shall submit to such committees long-term cost projections covering authorized lending levels for the loan programs for fiscal years 1981 and 1982.
(d) Low-income, limited-resource borrowers
(1) Notwithstanding any other provision of law, not less than 25 per centum of the loans for farm ownership purposes under subchapter I of this chapter, and not less than 25 per centum of the loans for farm operating purposes under subchapter II of this chapter, authorized to be insured, or made to be sold and insured, from the Agricultural Credit Insurance Fund during each fiscal year shall be for low-income, limited-resource borrowers.
(2) The Secretary shall provide notification to farm borrowers under this chapter, as soon as practicable after April 10, 1984, and in the normal course of loan making and loan servicing operations, of the provisions of this chapter 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.
(
References in Text
This chapter, referred to in subsecs. (a) and (d)(2), was in the original "this title", meaning title III of
This Act, referred to in subsec. (b)(5), is
Codification
Amendments
2018—Subsec. (a).
Subsec. (b)(1).
Subsec. (b)(2)(A)(ii)(III).
Subsec. (b)(5).
2014—Subsec. (b)(1).
Subsec. (b)(2)(A)(ii)(III).
2008—Subsec. (b)(1).
Subsec. (b)(1)(A).
Subsec. (b)(2)(A)(i).
Subsec. (b)(2)(A)(ii)(III).
Subsec. (b)(2)(B)(i).
2002—Subsec. (b)(1).
Subsec. (b)(2)(A)(ii)(III).
1996—Subsec. (a).
Subsec. (b).
1992—Subsec. (b)(2).
Subsec. (b)(3)(D) to (G).
Subsec. (b)(5), (6).
1991—Subsec. (b).
Subsec. (b)(3)(C).
1990—Subsec. (b).
1985—Subsec. (b).
Subsecs. (d), (e).
1984—Subsec. (e).
1981—Subsec. (d).
1980—
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1991 Amendment
Amendment by section 701(h)(1)(F) of
Effective Date of 1990 Amendment
Construction of 1990 Amendment
Nullification of Reservation of Funds During Fiscal Year 1999 for Guaranteed Loans for Qualified Beginning Farmers and Ranchers
§1995. Participation and financial and technical assistance by other Federal departments, etc., to program participants
Notwithstanding any other provision of law, other departments, agencies, and executive establishments of the Federal Government may participate and provide financial and technical assistance jointly with the Secretary to any applicant to whom assistance is being provided under any program administered by the Farmers Home Administration. Participation by any other department, agency, or executive establishment shall be only to the extent authorized for, and subject to the authorities of, such other department, agency, or executive establishment, except that any limitation on joint participation is superseded by this section.
(
§1996. Loans to resident aliens
Notwithstanding the provisions of this chapter limiting the making and insuring of loans to citizens of the United States, the Secretary may make and insure loans under this chapter to aliens lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act [
(
References in Text
This chapter, referred to in text, was in the original "this title", meaning title III of
The Immigration and Nationality Act, referred to in text, is act June 27, 1952, ch. 477,
§1997. Conservation easements
(a) Definitions
For purposes of this section:
(1) The term "governmental entity" means any agency of the United States, a State, or a unit of local government of a State.
(2) The terms "highly erodible land" and "wetland" have the meanings, respectively, that such terms are given in
(3) The term "wildlife" means fish or wildlife as defined in
(4) The term "recreational purposes" includes hunting.
(b) Contracts on loan security properties
Subject to subsection (c), the Secretary may enter into a contract related to real property for conservation, recreation, or wildlife purposes.
(c) Limitations
The Secretary may enter into a contract under subsection (b) if—
(1) such property is wetland, upland, or highly erodible land;
(2) such property is determined by the Secretary to be suitable for the purposes involved; and
(3)(A) such property secures any loan made under any law administered by the Secretary and held by the Secretary; and
(B) such contract better enables a qualified borrower to repay the loan in a timely manner, as determined by the Secretary.
(d) Terms and conditions
The terms and conditions specified in each such contract shall—
(1) specify the purposes for which such real property may be used;
(2) identify the conservation measures to be taken, and the recreational and wildlife uses to be allowed, with respect to such real property; and
(3) require such owner to permit the Secretary, and any person or governmental entity designated by the Secretary, to have access to such real property for the purpose of monitoring compliance with such contract.
(e) Purchase; limitation upon cancellation or prepayment
(1) Subject to paragraph (2), the Secretary may reduce or forgive the outstanding debt of a borrower—
(A) in the case of a borrower to whom the Secretary has made one or more outstanding loans under laws administered by the Secretary, by canceling that part of the aggregate amount of such outstanding loans that bears the same ratio to such 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 such loans; or
(B) 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 such 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.
(2) The amount so canceled or treated as prepaid pursuant to paragraph (1) shall not exceed—
(A) in the case of a delinquent loan, 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, whichever is greater; or
(B) in the case of a nondelinquent loan, 33 percent of the amount of the loan secured by the land.
(f) Consultations with Director of Fish and Wildlife Service
If the Secretary elects to use the authority provided by this section, the Secretary shall consult with the Director of the Fish and Wildlife Service for purposes of—
(1) selecting real property in which the Secretary may enter into contracts under this section;
(2) formulating the terms and conditions of such contracts; and
(3) enforcing such contracts.
(g) Enforcement
The Secretary, and any person or governmental entity designated by the Secretary, may enforce a contract entered into by the Secretary under this section.
(
Amendments
1996—Subsec. (b).
Subsec. (c).
Subsec. (c)(2).
Subsec. (c)(3).
Subsec. (c)(4).
Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsec. (g).
1990—Subsec. (a)(4), (5).
Subsec. (c).
Subsec. (c)(3)(A)(ii).
Subsec. (e).
Subsec. (h).
1988—Subsec. (c)(4).
Subsec. (e).
Effective Date of 1996 Amendment
Amendment by
§1998. Guaranteed farm loan programs
Notwithstanding any other provision of this chapter, the Secretary shall ensure that farm loan guarantee programs carried out under this chapter are designed so as to be responsive to borrower and lender needs and to include provisions under reasonable terms and conditions for advances, before completion of the liquidation process, of guarantee proceeds on loans in default.
(
References in Text
This chapter, referred to in text, was in the original "this title", meaning title III of
§1999. Interest rate reduction program
(a) Establishment of program
The Secretary shall establish and carry out in accordance with this section an interest rate reduction program for loans guaranteed under this chapter.
(b) Contracts with lenders
Under such program, the Secretary shall enter into a contract with, and make payments to, a legally organized institution to reduce during the term of such contract the interest rate paid by a borrower on a guaranteed loan made by such institution if—
(1) the borrower—
(A) is unable to obtain sufficient credit elsewhere to finance the actual needs of the borrower at reasonable rates and terms, taking into consideration private and cooperative rates and terms for a loan for a similar purpose and period of time in the community in or near which the borrower resides;
(B) is otherwise unable to make payments on such loan in a timely manner; and
(C) has a total estimated cash income during the 24-month period beginning on the date such contract is entered into (including all farm and nonfarm income) that will equal or exceed the total estimated cash expenses to be incurred by the borrower during such period (including all farm and nonfarm expenses); and
(2) the lender reduces during the term of such contract the annual rate of interest payable on such loan by a minimum percentage specified in such contract.
(c) Payments to lenders
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 such loan, except that such payments may not exceed the cost of reducing such rate by more than 4 percent.
(d) Duration of contracts
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 such loan.
(e) Agricultural Credit Insurance Fund use limitation
(1) Notwithstanding any other provision of this chapter, the Agricultural Credit Insurance Fund established under
(2)
(A)
(B)
(i)
(ii)
(f) List of lender participants in guaranteed loan program
The Secretary shall make available to farmers, on request, a list of lenders in the area that participate in guaranteed farm loan programs and other lenders in the area that express a desire to participate in such programs and that request inclusion in the list.
(g) Foreclosure action provision in farm loan guarantees
Notwithstanding any other provision of law, each contract of guarantee on a farm loan entered into under this chapter after January 6, 1988, shall contain a condition that the lender of the guaranteed loan may not initiate foreclosure action on the loan until 60 days after a determination is made with respect to the eligibility of the borrower thereof to participate in the program under this section.
(
References in Text
This chapter, referred to in subsecs. (a)(1), (e)(1), and (g), was in the original "this title", meaning title III of
Amendments
2018—Subsec. (e)(2)(B).
Subsec. (e)(2)(B)(i).
Subsec. (e)(2)(B)(ii).
2002—Subsec. (a).
Subsec. (e)(2).
1996—Subsec. (a).
Subsec. (f).
Subsec. (h).
1990—Subsec. (c).
Subsec. (d).
Subsec. (h)(1).
1988—Subsec. (b)(1)(C).
Subsecs. (f), (g).
Subsec. (h).
Effective Date of 1990 Amendment
Amendment by
Effective and Termination Dates
That part of section 1320 of
§2000. Homestead protection
(a) Definitions
As used in this section:
(1) The term "Administrator" means the Administrator of the Small Business Administration.
(2) The term "borrower-owner" means—
(A) a borrower of a loan made or insured by the Secretary or the Administrator who meets the eligibility requirements of subsection (c)(1); or
(B) in any 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.
(3) The term "farm program loan" means any loan made by the Administrator under the Small Business Act (
(4) The term "homestead property" means the principal residence and adjoining property possessed and occupied by a borrower-owner specified in paragraph (2) of this subsection, including a reasonable number of farm outbuildings located on the adjoining land that are useful to the occupants of the homestead, and no more than 10 acres of adjoining land that is used to maintain the family of the individual.
(5) The term "Secretary" means the Secretary of Agriculture.
(b) Occupancy of homestead upon foreclosure, bankruptcy, or liquidation; appraisal; period of occupancy
(1) 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—
(A) the Secretary forecloses, holds in inventory on January 6, 1988, or takes into inventory, property securing a loan made or insured under this chapter;
(B) the Administrator forecloses, holds in inventory on January 6, 1988, or takes into inventory, property securing a farm program loan made under the Small Business Act (
(C) the borrower-owner of a loan made or insured 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 such property in whole or in part.
(2) The value of the homestead property shall be determined insofar as possible by an independent appraisal made within six months from the date of the borrower-owner's application to retain possession and occupancy of the homestead property.
(3) The period of occupancy of homestead property under this subsection may not exceed five years, but in no case shall the Secretary or the Administrator grant a period of occupancy less than three years, subject to compliance with the requirements of subsection (c).
(c) Terms and conditions
(1) To be eligible to occupy homestead property, a borrower-owner of a loan made or insured by the Secretary or the Administrator shall—
(A) apply for such occupancy not later than 30 days after the property is acquired by the Secretary or Administrator, or for property in inventory on January 6, 1988, the borrower-owner shall apply for occupancy not later than 30 days after January 6, 1988;
(B) have received from farming or ranching operations gross farm income reasonably commensurate with—
(i) the size and location of the farming unit of the borrower-owner; and
(ii) local agricultural conditions (including natural and economic conditions), in at least 2 calendar years during the 6-year period preceding the calendar year in which the application is made;
(C) have received from farming or ranching operations at least 60 percent of the gross annual income of the borrower-owner and any spouse of the borrower-owner in at least 2 calendar years during any 6-year period described in subparagraph (B);
(D) have continuously occupied the homestead property during the 6-year period described in subparagraph (B), except that such requirement may be waived if a borrower-owner has, 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;
(E) during the period of the occupancy of the homestead property, pay a reasonable sum as rent for such 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;
(F) during the period of the occupancy of the homestead property, maintain the property in good condition; and
(G) meet such other reasonable and necessary terms and conditions as the Secretary may require consistent with this section.
(2) For purposes of subparagraphs (B) and (C) of paragraph (1), the term "farming or ranching operations" shall include rent paid by lessees of agricultural land during any period in which the borrower-owner, due to circumstances beyond the control of the borrower-owner, is unable to actively farm such land.
(3) For the purposes of paragraph (1)(E), the failure of the borrower-owner to make timely rental payments shall constitute cause for the termination of all rights of such borrower-owner to possession and occupancy of the homestead property under this section. In effecting any such termination, the Secretary shall afford the borrower-owner or lessee the notice and hearing procedural rights described in section 1983b 2 of this title and shall comply with all applicable State and local laws governing eviction from residential property.
(4)(A) The period of occupancy allowed the prior owner of homestead property under this section shall be the period requested in writing by the prior owner, except that such period shall not exceed 5 years.
(B) At any time during the period of occupancy of a borrower-owner who is a socially disadvantaged farmer or rancher (as defined in
(5) No rights 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 any law, except that in the case of death or incompetency of such borrower-owner, such rights and agreements shall be transferable to the spouse of the borrower-owner if the spouse agrees to comply with the terms and conditions thereof.
(6) Not later than the date of acquisition of the property securing a loan made under this chapter (or, in the case of real property in inventory on April 4, 1996, not later than 5 days after April 4, 1996), the Secretary shall notify the borrower-owner from whom the property was acquired of the availability of homestead protection rights under this section.
(d) First right of refusal of reacquisition
At the end of the period of occupancy described in subsection (c), the Secretary or the Administrator shall grant to the borrower-owner a first right of 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. Such terms and conditions shall not be less favorable than those intended to be offered to any other buyer.
(e) Value as measure of reacquisition payment of principal
At the time any 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 as established under subsection (b)(2).
(f) Contract authority
The Secretary may enter into contracts authorized by this section before the Secretary acquires title to the homestead property.
(g) Conflict between Federal and State law
In the event of any conflict between this section and any provision of the law of any State 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 the lender thereof, such provision of State law shall prevail.
(
References in Text
The Small Business Act, referred to in subsecs. (a)(3) and (b)(1)(B), is
This chapter, referred to in subsecs. (b)(1)(A) and (c)(6), was in the original "this title", meaning title III of
Codification
Amendments
2008—Subsec. (c)(4)(B).
1996—Subsec. (c)(1)(A).
Subsec. (c)(6).
1992—Subsec. (a)(4), (5).
Subsec. (b)(2).
1991—Subsec. (a)(2) to (4).
Subsec. (b)(1).
Subsec. (b)(3).
Subsecs. (c), (d), (g).
1988—Subsec. (a)(3).
Subsec. (b)(1).
Subsec. (c).
Subsec. (d).
Subsecs. (f), (g).
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1996 Amendment
Amendment by
Effective Date of 1992 Amendment
Effective Date of 1991 Amendment
Amendment by section 701(h)(2) of
1 So in original. Probably should be "subchapter".
2 See References in Text note below.
§2001. Debt restructuring and loan servicing
(a) In general
The Secretary shall modify delinquent farmer program loans made or insured under this chapter, or purchased from the lender or the Federal Deposit Insurance Corporation under
(1) to avoid losses to the Secretary on such loans, 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)), whenever these procedures would facilitate keeping the borrower on the farm or ranch, or otherwise through the use of primary loan service programs as provided in this section; and
(2) to ensure that borrowers are able to continue farming or ranching operations.
(b) Eligibility
To be eligible to obtain assistance under subsection (a)—
(1) the delinquency must be due to circumstances 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);
(2) the borrower must have acted in good faith with the Secretary in connection with the loan as defined in regulations issued by the Secretary;
(3) the borrower must present a preliminary plan to the Secretary that contains reasonable assumptions that demonstrate that the borrower will be able to—
(A) meet the necessary family living and farm operating expenses; and
(B) service all debts, including those of the loans restructured; and
(4) the loan, if restructured, must 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.
(c) Restructuring determinations
(1) Determination of net recovery
In determining the net recovery from the involuntary liquidation of a loan under this section, the Secretary shall calculate—
(A) the recovery value of the collateral securing the loan, in accordance with paragraph (2); and
(B) the value of the rest