1. U.S. Code
  2. title 7
  3. chapter 50
  4. subchapter IV
  5. § 1988

Collapse to view only § 1988. Appropriations

§ 1981. Farmers Home Administration
(a) Appointment and compensation of Administrator; transfer of powers, duties, and assets pertaining to agricultural credit

In accordance with section 2006a of this title, for purposes of this chapter, and for the administration of assets under the jurisdiction of the Secretary of Agriculture pursuant to the Farmers Home Administration Act of 1946, as amended, the Bankhead-Jones Farm Tenant Act, as amended, the Act of August 28, 1937, as amended, the Act of April 6, 1949, as amended, the Act of August 31, 1954, as amended, and the powers and duties of the Secretary under any other Act authorizing agricultural credit, the Secretary may assign and transfer such powers, duties, and assets to such officers or agencies of the Department of Agriculture as the Secretary considers appropriate.

(b) Powers of Secretary of AgricultureThe 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
1 See Change of Name note below.
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 [42 U.S.C. 1441 et seq.]. In the case of a security instrument entered into under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.), the Secretary shall notify the Attorney General of the intent of the Secretary to exercise the authority of the Secretary under this paragraph. The Secretary may not require liquidation of property securing any farmer program loan or acceleration of any payment required under any farmer program loan as a prerequisite to initiating an action authorized under this subsection. After consultation with a local or area county committee, the Secretary may release borrowers or others obligated on a debt, except for debt incurred under the Housing Act of 1949, from personal liability with or without payment of any consideration at the time of the compromise, adjustment, reduction, or charge-off of any claim, except that no compromise, adjustment, reduction, or charge-off of any claim may be made or carried out after the claim has been referred to the Attorney General, unless the Attorney General approves;
(5) except for activities conducted under the Housing Act of 1949 [42 U.S.C. 1441 et seq.], collect all claims and obligations administered by the Farmers Home Administration, or under any mortgage, lease, contract, or agreement entered into or administered by the Farmers Home Administration and, if in his judgment necessary and advisable, pursue the same to final collection in any court having jurisdiction;
(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
2 See References in Text note below.
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 [7 U.S.C. 950bb]; or
(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 [7 U.S.C. 950bb(e)].
(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 section 653 of title 42 and section 6103(l)(7)(D)(ix) of title 26 to verify income for individuals participating in sections 502, 504, 521, and 542 of the Housing Act of 1949 (42 U.S.C. 1472, 1474, 1490a, and 1490r), notwithstanding section 653(l) of title 42.

(Pub. L. 87–128, title III, § 331, Aug. 8, 1961, 75 Stat. 312; Pub. L. 90–488, § 11, Aug. 15, 1968, 82 Stat. 771; Pub. L. 92–419, title I, § 124,

CITE AS: 7 USC 1981

§ 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).

(Pub. L. 87–128, title III, § 331A, as added Pub. L. 95–334, title I, § 122, Aug. 4, 1978, 92 Stat. 427; amended Pub. L. 101–624, title XXIII, § 2303(b), Nov. 28, 1990, 104 Stat. 3981; Pub. L. 110–234, title XIV, § 14002(a), May 22, 2008, 122 Stat. 1442; Pub. L. 110–246, § 4(a), title XIV, § 14002(a), June 18, 2008, 122 Stat. 1664, 2204.)

CITE AS: 7 USC 1981a

§ 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.
(Pub. L. 87–128, title III, § 331B, as added Pub. L. 98–258, title VI, § 605, Apr. 10, 1984, 98 Stat. 139; amended Pub. L. 107–171, title V, § 5305, May 13, 2002, 116 Stat. 345.)

CITE AS: 7 USC 1981b

§ 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.
(Pub. L. 87–128, title III, § 331C, as added Pub. L. 99–198, title XIII, § 1310(a), Dec. 23, 1985, 99 Stat. 1523.)

CITE AS: 7 USC 1981c

§ 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) ContentsThe 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) TimingThe 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.

(Pub. L. 87–128, title III, § 331D, as added Pub. L. 100–233, title VI, § 605, Jan. 6, 1988, 101 Stat. 1666; amended Pub. L. 101–624, title XVIII, § 1807, Nov. 28, 1990, 104 Stat. 3819; Pub. L. 102–554, § 10, Oct. 28, 1992, 106 Stat. 4151; Pub. L. 104–127, title VI, § 633, Apr. 4, 1996, 110 Stat. 1092; Pub. L. 115–334, title V, § 5401(b)(1), Dec. 20, 2018, 132 Stat. 4674.)

CITE AS: 7 USC 1981d

§ 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 (42 U.S.C. 5121 et seq.).

(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 (42 U.S.C. 5121 et seq.), including a borrower or applicant who has a qualifying loss but is not located in a designated or declared disaster area.

(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.

(Pub. L. 87–128, title III, § 331E, as added Pub. L. 100–233, title VI, § 606, Jan. 6, 1988, 101 Stat. 1667; amended Pub. L. 102–237, title V, § 501(d)(1), Dec. 13, 1991, 105 Stat. 1866; Pub. L. 102–552, title V, § 516(g)(1), Oct. 28, 1992, 106 Stat. 4138.)

CITE AS: 7 USC 1981e

§ 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.

(Pub. L. 87–128, title III, § 331F, as added Pub. L. 101–624, title XVIII, § 1808(a), Nov. 28, 1990, 104 Stat. 3820.)

CITE AS: 7 USC 1981f

§ 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 chapter 13 of title 10, or any other provision of law during a war or during a national emergency declared by the President or Congress, regardless of the location at which the active duty service is performed; or
(2) in the case of a member of the National Guard, is on full-time National Guard duty (as defined in section 101(d)(5) of title 10) under a call to active service authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days under section 502(f) of title 32 for purposes of responding to a national emergency declared by the President and supported by Federal funds.
(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 section 2008h of this title or any other provision of this chapter, a borrower who receives assistance under this section shall not, as a result of the assistance, be considered to be delinquent or receiving debt forgiveness for purposes of receiving a direct or guaranteed loan under this chapter.

(Pub. L. 87–128, title III, § 332, as added Pub. L. 108–375, div. A, title VI, § 664, Oct. 28, 2004, 118 Stat. 1974; amended Pub. L. 115–232, div. A, title XII, § 1204(a)(2), Aug. 13, 2018, 132 Stat. 2017.)

CITE AS: 7 USC 1982

§ 1983. Special conditions and limitations on loansIn 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 section 1926, 1932, or 1944 of this title, require—
(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 section 1934 of this title, the borrower may be able to obtain a loan under section 1922 of this title), at reasonable rates and terms for loans for similar purposes and periods of time, the borrower will, upon request by the Secretary, apply for and accept such loan in sufficient amount to repay the Secretary or the insured lender, or both, and to pay for any stock necessary to be purchased in a cooperative lending agency in connection with such loan;
(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 section 101(12) of title 38, for a loan under subchapter I or II to be given preference over a similar application from a person who is not a veteran of any war, if the applications are on file in a county or area office at the same time;
(6) in the case of water and waste disposal direct and guaranteed loans provided under section 1926 of this title, encourage, to the maximum extent practicable, private or cooperative lenders to finance rural water and waste disposal facilities by—
(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 section 1926(a) of this title, charge and collect from the lender fees in such amounts as to bring down the costs of subsidies for the insured or guaranteed loan, except that the fees shall not act as a bar to participation in the programs nor be inconsistent with current practices in the marketplace.
(Pub. L. 87–128, title III, § 333, Aug. 8, 1961, 75 Stat. 314; Pub. L. 90–488, § 12, Aug. 15, 1968, 82 Stat. 771; Pub. L. 91–620, § 3, Dec. 31, 1970, 84 Stat. 1862; Pub. L. 92–419, title I, §§ 118(b), 125, 126, Aug. 30, 1972, 86 Stat. 664, 666; Pub. L. 95–334, title I, § 123, Aug. 4, 1978, 92 Stat. 428; Pub. L. 96–438, § 3(c), Oct. 13, 1980, 94 Stat. 1875; Pub. L. 97–98, title XVI, § 1604, Dec. 22, 1981, 95 Stat. 1346; Pub. L. 101–624, title XVIII, § 1810, title XXIII, § 2388(e), Nov. 28, 1990, 104 Stat. 3820, 4053; Pub. L. 102–237, title V, § 501(e), Dec. 13, 1991, 105 Stat. 1867; Pub. L. 102–554, § 12, Oct. 28, 1992, 106 Stat. 4151; Pub. L. 103–354, title II, § 227(b)(2), Oct. 13, 1994, 108 Stat. 3218; Pub. L. 104–127, title VI, §§ 634, 635(a), 636, Apr. 4, 1996, 110 Stat. 1093; Pub. L. 107–171, title V, § 5306, May 13, 2002, 116 Stat. 345; Pub. L. 113–79, title VI, § 6019, Feb. 7, 2014, 128 Stat. 846; Pub. L. 115–334, title VI, § 6418, Dec. 20, 2018, 132 Stat. 4764.)

CITE AS: 7 USC 1983

§ 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 section 1932(a) of this title, or for a loan under section 1926(a) of this title, that is to be disapproved by the Secretary solely because the Secretary lacks the necessary amount of funds to make the loan or guarantee shall not be disapproved but shall be placed in pending status.
(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 section 1929 of this title; and
(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
1 See References in Text note below.
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 section 2006b of this title the loans of each seasoned loan borrower. If, based on the review, it is determined that a borrower would be able to obtain a loan, guaranteed by the Secretary, from a commercial or cooperative lender at reasonable rates and terms for loans for similar purposes and periods of time, the Secretary shall assist the borrower in applying for the commercial or cooperative loan.
(3) In accordance with section 2006d of this title, the Secretary shall prepare a prospectus on each seasoned direct loan borrower determined eligible to obtain a guaranteed loan. The prospectus shall contain a description of the amounts of loan guarantee and interest assistance that the Secretary will provide to the seasoned direct loan borrower to enable the seasoned direct loan borrower to carry out a financially viable farming plan if a guaranteed loan is made.
(4)Verification.—
(A)In general.—The Secretary shall provide a prospectus of a seasoned direct loan borrower to each approved lender whose lending area includes the location of the seasoned direct loan borrower.
(B)Notification.—The Secretary shall notify each borrower of a loan that a prospectus has been provided to a lender under subparagraph (A).
(C)Credit extended.—If the Secretary receives an offer from an approved lender to extend credit to the seasoned direct loan borrower under terms and conditions contained in the prospectus, the seasoned direct loan borrower shall not be eligible for an insured loan from the Secretary under subchapter I or II, except as otherwise provided in this subsection.
(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 section 1999 of this title.
(g) Simplified application forms for loan guarantees
(1) In generalThe 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 section 1932(a)(2)(A) of this title the principal amount of which is—
(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 section 1926(a) of this title the grant award amount or principal loan amount, respectively, of which is $300,000 or less.

(3) AdministrationIn 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 sections 1926, 1926c, 1926d, 1926e, 1932(b), 1932(c), 1932(e), 1936b, 2008p, and 2008s of this title.

(Pub. L. 87–128, title III, § 333A, as added Pub. L. 99–198, title XIII, § 1312(a), Dec. 23, 1985, 99 Stat. 1524; amended Pub. L. 101–624, title XVIII, § 1811, title XXIII, § 2388(f), Nov. 28, 1990, 104 Stat. 3821, 4053; Pub. L. 102–554, §§ 13–15, Oct. 28, 1992, 106 Stat. 4152, 4153; Pub. L. 104–127, title VI, § 637, Apr. 4, 1996, 110 Stat. 1093; Pub. L. 107–171, title V, § 5307, title VI, § 6019, May 13, 2002, 116 Stat. 345, 362; Pub. L. 110–234, title VI, § 6012(b)(3), May 22, 2008, 122 Stat. 1165; Pub. L. 110–246, § 4(a), title VI, § 6012(b)(3), June 18, 2008, 122 Stat. 1664, 1927; Pub. L. 113–79, title VI, § 6020(a), Feb. 7, 2014, 128 Stat. 847; Pub. L. 115–334, title V, § 5401(c)(1), title VI, § 6601(a)(2), Dec. 20, 2018, 132 Stat. 4674, 4776.)

CITE AS: 7 USC 1983a

§ 1983b. Beginning farmer and rancher individual development accounts pilot program
(a) DefinitionsIn 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 participantThe 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 generalThe term “qualified entity” means—
(i) 1 or more organizations—(I) described in section 501(c)(3) of title 26; and(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 generalThe 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 fundsOf 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) ReversionOn 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 requirementsTo 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 generalAn 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) CriteriaIn 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) PreferencesIn 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 section 2003(e)(2) of this title); and
(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 paymentsThe 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 generalNot 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 reviewThe 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) RegulationsIn 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.

(Pub. L. 87–128, title III, § 333B, as added Pub. L. 110–234, title V, § 5301, May 22, 2008, 122 Stat. 1147, and Pub. L. 110–246, § 4(a), title V, § 5301, June 18, 2008, 122 Stat. 1664, 1908; amended Pub. L. 113–79, title V, § 5301, Feb. 7, 2014, 128 Stat. 839; Pub. L. 115–334, title V, § 5301, Dec. 20, 2018, 132 Stat. 4671.)

CITE AS: 7 USC 1983b

§ 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).

(Pub. L. 87–128, title III, § 333C, as added Pub. L. 100–233, title VI, § 609, Jan. 6, 1988, 101 Stat. 1668.)

CITE AS: 7 USC 1983c

§ 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).
(Pub. L. 87–128, title III, § 333D, as added Pub. L. 113–79, title V, § 5302, Feb. 7, 2014, 128 Stat. 839.)

CITE AS: 7 USC 1983d

§ 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.
(Pub. L. 87–128, title III, § 334, Aug. 8, 1961, 75 Stat. 315.)

CITE AS: 7 USC 1984

§ 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 generalSubject 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) TermThe 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 generalThe 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
1 See References in Text note below.
(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 section 9601(14) of title 42) is located on the property and the Secretary takes remedial action to protect human health or the environment if the property is taken into inventory, the Secretary shall accept the voluntary conveyance of the property only if the Secretary determines that it is in the best interests of the Federal Government.
(v)Foreclosure procedures.—(I)Notice to borrower.—If an Indian borrower-owner does not voluntarily convey to the Secretary real property described in clause (i), not less than 30 days before a foreclosure sale of the property, the Secretary shall provide the Indian borrower-owner with the option of—(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)Notice to tribe.—If an Indian borrower-owner does not voluntarily convey to the Secretary real property described in clause (i), not less than 30 days before a foreclosure sale of the property, the Secretary shall provide written notice to the Indian tribe that has jurisdiction over the reservation in which the real property is located of—(aa) the sale;(bb) the fair market value of the property; and(cc) the requirements of this subparagraph.(III)Assumed loans.—If an Indian tribe assumes a loan under subclause (I)—(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 sections 5136 to 5143 of title 25.
(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 section 9601(14) of title 42) is located on the property and the Secretary takes remedial action to protect human health or the environment if the property is taken into inventory, subclause (I) shall apply only if the Secretary determines that it is in the best interests of the Federal Government.
(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 section 3801 of title 16), the Secretary may require the use of specified conservation practices on such land as a condition of the sale or lease of such land.
(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 section 2001 of this title.
(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 section 2001 of this title, the Secretary shall make a final determination on the request. Notwithstanding the 12-month limitation provided for in paragraph (3), releases shall continue to be made to the borrower until a denial or dismissal of the application of the borrower for restructuring under section 2001 of this title is made. The amount of essential household and farm operating expenses which may be released to any borrower eligible for such releases after 12 months may exceed $18,000, by an amount proportionate to the period of time beyond 12 months before a final determination is made by the Secretary.
(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) LimitationThe 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.

(Pub. L. 87–128, title III, § 335, Aug. 8, 1961, 75 Stat. 315; Pub. L. 92–419, title I, § 127, Aug. 30, 1972, 86 Stat. 666; Pub. L. 99–198, title XIII, §§ 1314(a), 1315, 1318(b)(1), Dec. 23, 1985, 99 Stat. 1526, 1528, 1531; Pub. L. 100–233, title VI, §§ 610, 611, Jan. 6, 1988, 101 Stat. 1669, 1673; Pub. L. 101–624, title XVIII, §§ 1813(a)–(h)(1), 1816(e), title XXIII, §§ 2303(c), 2388(g), Nov. 28, 1990, 104 Stat. 3821–3823, 3827, 3981, 4053; Pub. L. 102–237, title V, § 501(f), Dec. 13, 1991, 105 Stat. 1867; Pub. L. 102–552, title V, § 516(h)(1), Oct. 28, 1992, 106 Stat. 4138; Pub. L. 102–554, §§ 16, 17, Oct. 28, 1992, 106 Stat. 4154; Pub. L. 104–127, title VI, §§ 638, 639, Apr. 4, 1996, 110 Stat. 1093, 1097; Pub. L. 107–171, title V, § 5308, May 13, 2002, 116 Stat. 345; Pub. L. 110–234, title V, § 5302(a), May 22, 2008, 122 Stat. 1151; Pub. L. 110–246, § 4(a), title V, § 5302(a), June 18, 2008, 122 Stat. 1664, 1913.)

CITE AS: 7 USC 1985

§ 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.

(Pub. L. 87–128, title III, § 336, Aug. 8, 1961, 75 Stat. 316; Pub. L. 98–258, title VI, § 606, Apr. 10, 1984, 98 Stat. 140; Pub. L. 107–171, title V, § 5501(b), May 13, 2002, 116 Stat. 351.)

CITE AS: 7 USC 1986

§ 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.
(Pub. L. 87–128, title III, § 337, Aug. 8, 1961, 75 Stat. 316; Pub. L. 99–198, title XIII, § 1316, Dec. 23, 1985, 99 Stat. 1528.)

CITE AS: 7 USC 1987

§ 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.
(Pub. L. 87–128, title III, § 338, Aug. 8, 1961, 75 Stat. 316; Pub. L. 89–429, § 5, May 24, 1966, 80 Stat. 167; Pub. L. 100–233, title VII, § 711(a), Jan. 6, 1988, 101 Stat. 1707; Pub. L. 100–399, title VI, § 605, Aug. 17, 1988, 102 Stat. 1006; Pub. L. 101–624, title XXIII, § 2303(d), Nov. 28, 1990, 104 Stat. 3981; Pub. L. 104–127, title VII, § 749(a), Apr. 4, 1996, 110 Stat. 1129; Pub. L. 105–362, title I, § 101(a), Nov. 10, 1998, 112 Stat. 3281.)

CITE AS: 7 USC 1988

§ 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 requirementsNotwithstanding 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 certificationNotwithstanding 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 generalCommencing 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 certificationNotwithstanding 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.

(Pub. L. 87–128, title III, § 339, Aug. 8, 1961, 75 Stat. 318; Pub. L. 102–554, § 18, Oct. 28, 1992, 106 Stat. 4155; Pub. L. 106–31, title III, § 3019(a), May 21, 1999, 113 Stat. 99; Pub. L. 107–171, title V, § 5309, May 13, 2002, 116 Stat. 346; Pub. L. 115–334, title V, § 5401(d), Dec. 20, 2018, 132 Stat. 4674.)

CITE AS: 7 USC 1989

§ 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.

(Pub. L. 87–128, title III, § 340, Aug. 8, 1961, 75 Stat. 318.)

CITE AS: 7 USC 1990

§ 1990a. Refinancing of certain rural hospital debt

Assistance under section 1926(a) of this title for a community facility, or under section 1932 of this title, may include the refinancing of a debt obligation of a rural hospital as an eligible loan or loan guarantee purpose if the assistance would help preserve access to a health service in a rural community, meaningfully improve the financial position of the hospital, and otherwise meet the financial feasibility and adequacy of security requirements of the Rural Development Agency.

(Pub. L. 87–128, title III, § 342, as added Pub. L. 115–334, title VI, § 6103, Dec. 20, 2018, 132 Stat. 4728.)

CITE AS: 7 USC 1990a

§ 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 section 1929 of this title.
(10) The term “farmer program loan” means a farm ownership loan (FO) under section 1923 of this title, operating loan (OL) under section 1942 of this title, soil and water loan (SW) under section 1924 of this title, emergency loan (EM) under section 1961 of this title, economic emergency loan (EE) under section 202 of the Emergency Agricultural Credit Adjustment Act (title II of Public Law 95-334), economic opportunity loan (EO) under the Economic Opportunity Act of 1961 (42 U.S.C. 2942), softwood timber loan (ST) under section 1254 of the Food Security Act of 1985, or rural housing loan for farm service buildings (RHF) under section 1472 of title 42.
(11) The term “qualified beginning farmer or rancher” means an applicant, regardless of whether the applicant is participating in a program under section 1935 of this title—
(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
1 So in original.
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)Debt forgiveness.—
(A)In general.—Except as provided in subparagraph (B), the term “debt forgiveness” means reducing or terminating a farmer program loan made or guaranteed under this chapter, in a manner that results in a loss to the Secretary, through—
(i) writing down or writing off a loan under section 2001 of this title;
(ii) compromising, adjusting, reducing, or charging-off a debt or claim under section 1981 of this title;
(iii) paying a loss on a guaranteed loan under section 2005 of this title; or
(iv) discharging a debt as a result of bankruptcy.
(B)Exceptions.—The term “debt forgiveness” does not include—
(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)Rural and rural area.—
(A)In general.—Subject to subparagraphs (B) through (I), the terms “rural” and “rural area” mean any area other than—
(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)Water and waste disposal grants and direct loans.—For the purpose of water and waste disposal grants and direct loans provided under paragraphs (1) and (2) of section 1926(a) of this title, the terms “rural” and “rural area” mean a city, town, or unincorporated area that has a population of no more than 10,000 inhabitants.
(C)Community facility loans and grants.—For the purpose of community facility direct loans and grants under paragraphs (1), (19), (20), and (21) of section 1926(a) of this title, the terms “rural” and “rural area” mean any area other than a city, town, or unincorporated area that has a population of greater than 20,000 inhabitants.
(D)Areas rural in character.—
(i)Application.—This subparagraph applies to—(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)Determination.—Notwithstanding any other provision of this paragraph, on the petition of a unit of local government in an area described in clause (i) or on the initiative of the Under Secretary for Rural Development, the Under Secretary may determine that a part of an area described in clause (i) is a rural area for the purposes of this paragraph, if the Under Secretary finds that the part is rural in character, as determined by the Under Secretary.
(iii)Administration.—In carrying out this subparagraph, the Under Secretary for Rural Development shall—(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 section 141(a) of title 13.
(E)Exclusions.—Notwithstanding any other provision of this paragraph, in determining which census blocks in an urbanized area are not in a rural area (as defined in this paragraph), the Secretary shall exclude any cluster of census blocks that would otherwise be considered not in a rural area only because the cluster is adjacent to not more than 2 census blocks that are otherwise considered not in a rural area under this paragraph.
(F)Urban area growth.—
(i)Application.—This subparagraph applies to—(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)Adjustments.—The Secretary may, by regulation only, consider—(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)Appeals.—A program applicant may appeal an estimate made under clause (i)(I) based on appropriate data for an area, as determined by the Secretary.
(G)Hawaii and puerto rico.—Notwithstanding any other provision of this paragraph, within the areas of the County of Honolulu, Hawaii, and the Commonwealth of Puerto Rico, the Secretary may designate any part of the areas as a rural area if the Secretary determines that the part is not urban in character, other than any area included in the Honolulu Census Designated Place or the San Juan Census Designated Place.
(H)Exclusion of incarcerated populations.—Populations of individuals incarcerated on a long-term or regional basis shall not be included in determining whether an area is “rural” or a “rural area”.
(I)Limited exclusion of military base populations.—The first 1,500 individuals who reside in housing located on a military base shall not be included in determining whether an area is “rural” or a “rural area”.
(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)Preservation loan service program.—The term “preservation loan service program” means homestead retention as authorized under section 2000 of this title.
(Pub. L. 87–128, title III, § 343, as added Pub. L. 87–703, title IV, § 401(5), Sept. 27, 1962, 76 Stat. 632; amended Pub. L. 89–586, Sept. 19, 1966, 80 Stat. 809; Pub. L. 92–419, title I, § 128(a), Aug. 30, 1972, 86 Stat. 666; Pub. L. 95–334, title I, § 124, Aug. 4, 1978, 92 Stat. 428; Pub. L. 96–438, § 2(2), Oct. 13, 1980, 94 Stat. 1872; Pub. L. 99–198, title XIII, § 1301(b), Dec. 23, 1985, 99 Stat. 1519; Pub. L. 100–233, title VI, § 602, Jan. 6, 1988, 101 Stat. 1665; Pub. L. 101–624, title XVIII, § 1814, title XXIII, § 2388(h), Nov. 28, 1990, 104 Stat. 3824, 4053; Pub. L. 102–237, title VII, § 702(h)(1), Dec. 13, 1991, 105 Stat. 1880; Pub. L. 102–554, § 19, Oct. 28, 1992, 106 Stat. 4158; Pub. L. 104–127, title VI, §§ 640, 661(h), title VII, § 749(b)(2), Apr. 4, 1996, 110 Stat. 1098, 1107, 1129; Pub. L. 105–113, § 3(c), Nov. 21, 1997, 111 Stat. 2275; Pub. L. 107–171, title V, § 5310, title VI, § 6020(a), May 13, 2002, 116 Stat. 346, 362; Pub. L. 110–234, title VI, § 6018(a), May 22, 2008, 122 Stat. 1170; Pub. L. 110–246, § 4(a), title VI, § 6018(a), June 18, 2008, 122 Stat. 1664, 1931; Pub. L. 113–79, title V, § 5303, Feb. 7, 2014, 128 Stat. 839; Pub. L. 115–334, title V, § 5401(e)(1), (f)(1), title VI, §§ 6301(a), 6402(a), Dec. 20, 2018, 132 Stat. 4674, 4748, 4757.)

CITE AS: 7 USC 1991

§ 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 section 1926(a)(1) of this title prior to its amendment by the Rural Development Act of 1972) shall be made by the Secretary either for sale as an insured loan or otherwise under sections 1926(a)(1), 1932, or 1942(c) of this title unless the Secretary shall have determined that no other lender is willing to make such loan and assume 10 per centum of any loss sustained thereon. No contract guaranteeing any such loan by such other lender shall require the Secretary to guarantee more than 90 per centum of the principal and interest on such loan.

(Pub. L. 87–128, title III, § 344, as added Pub. L. 92–419, title I, § 129, Aug. 30, 1972, 86 Stat. 666; amended Pub. L. 94–35, § 2, June 16, 1975, 89 Stat. 214; Pub. L. 104–127, title VI, § 661(i), Apr. 4, 1996, 110 Stat. 1107.)

CITE AS: 7 USC 1992

§ 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 section 2006a of this title;
(2) the loan assessment process established by section 2006b of this title;
(3) the supervised credit requirement established by section 2006c of this title;
(4) the market placement program established by section 2006d of this title; and
(5) other appropriate programs and authorities, as determined by the Secretary.
(Pub. L. 87–128, title III, § 345, as added Pub. L. 110–234, title V, § 5304, May 22, 2008, 122 Stat. 1153, and Pub. L. 110–246, § 4(a), title V, § 5304, June 18, 2008, 122 Stat. 1664, 1914.)

CITE AS: 7 USC 1993

§ 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 generalThe Secretary may make or guarantee loans under subchapters I and II from the Agricultural Credit Insurance Fund provided for in section 1929 of this title for not more than $10,000,000,000 for each of fiscal years 2019 through 2023, of which, for each fiscal year—
(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 ⅔ of the amount for the down payment loan program under section 1935 of this title and joint financing arrangements under section 1927(a)(3)(D) of this title until April 1 of the fiscal year.

(ii) Operating loansOf 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 section 1922, 1935, or 1941 of this title, the Secretary shall make or guarantee the loan if sufficient funds reserved under this paragraph are available to make or guarantee the loan.

(3) Transfer for down payment loans
(A) In generalNotwithstanding 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 section 1935 of this title, if sufficient direct farm ownership loan funds are not otherwise available; and
(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) NoticeNot 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.
(Pub. L. 87–128, title III, § 346, as added Pub. L. 95–334, title I, § 125, Aug. 4, 1978, 92 Stat. 428; amended Pub. L. 96–438, § 4, Oct. 13, 1980, 94 Stat. 1876; Pub. L. 97–35, title I, § 164, Aug. 13, 1981, 95 Stat. 379; Pub. L. 98–258, title VI, § 607, Apr. 10, 1984, 98 Stat. 140; Pub. L. 99–198, title XIII, § 1317, Dec. 23, 1985, 99 Stat. 1529; Pub. L. 101–508, title I, § 1202(a), Nov. 5, 1990, 104 Stat. 1388–9; Pub. L. 101–624, title XXIII, § 2388(i), Nov. 28, 1990, 104 Stat. 4053; Pub. L. 102–237, title VII, §§ 701(h)(1)(F), 702(i), Dec. 13, 1991, 105 Stat. 1880, 1881; Pub. L. 102–554, § 20, Oct. 28, 1992, 106 Stat. 4159; Pub. L. 104–127, title VI, § 641, Apr. 4, 1996, 110 Stat. 1098; Pub. L. 107–171, title V, §§ 5311, 5312, May 13, 2002, 116 Stat. 346, 347; Pub. L. 110–234, title V, §§ 5302(b), 5303, May 22, 2008, 122 Stat. 1152; Pub. L. 110–246, § 4(a), title V, §§ 5302(b), 5303, June 18, 2008, 122 Stat. 1664, 1913, 1914; Pub. L. 113–79, title V, §§ 5304, 5305, Feb. 7, 2014, 128 Stat. 840; Pub. L. 115–334, title V, §§ 5302–5304, 5401(g), Dec. 20, 2018, 132 Stat. 4671, 4672, 4674.)

CITE AS: 7 USC 1994

§ 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.

(Pub. L. 87–128, title III, § 347, as added Pub. L. 95–334, title I, § 125, Aug. 4, 1978, 92 Stat. 429.)

CITE AS: 7 USC 1995

§ 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 [8 U.S.C. 1101 et seq.]: Provided, That no loans may be made or insured under this chapter to such aliens until the Secretary issues regulations establishing the terms and conditions under which such aliens may receive loans: Provided further

(Pub. L. 87–128, title III, § 348, as added Pub. L. 96–438, § 2(3), Oct. 13, 1980, 94 Stat. 1872.)

CITE AS: 7 USC 1996

§ 1997. Conservation easements
(a) DefinitionsFor 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 section 3801 of title 16.
(3) The term “wildlife” means fish or wildlife as defined in section 3371 of title 16.
(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) LimitationsThe 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 conditionsThe 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 ServiceIf 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.

(Pub. L. 87–128, title III, § 349, as added Pub. L. 99–198, title XIII, § 1318(a), Dec. 23, 1985, 99 Stat. 1530; amended Pub. L. 100–233, title VI, § 612, Jan. 6, 1988, 101 Stat. 1674; Pub. L. 101–624, title XVIII, § 1815, title XXIII, § 2388(j), Nov. 28, 1990, 104 Stat. 3825, 4053; Pub. L. 104–127, title VI, § 642, Apr. 4, 1996, 110 Stat. 1102; Pub. L. 117–243, § 2(b)(1), Dec. 20, 2022, 136 Stat. 2336.)

CITE AS: 7 USC 1997

§ 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.

(Pub. L. 87–128, title III, § 350, as added Pub. L. 99–198, title XIII, § 1319, Dec. 23, 1985, 99 Stat. 1531.)

CITE AS: 7 USC 1998

§ 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 lendersUnder 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 section 1929 of this title may be used by the Secretary to carry out this section.
(2)Maximum amount of funds.—
(A)In general.—The total amount of funds used by the Secretary to carry out this section for a fiscal year shall not exceed $750,000,000.
(B)Beginning and veteran farmers and ranchers.—
(i)In general.—The Secretary shall reserve not less than 15 percent of the funds used by the Secretary under subparagraph (A) to make payments for guaranteed loans made to beginning farmers and ranchers or veteran farmers and ranchers (as defined in section 2279(a) of this title).
(ii)Duration of reservation of funds.—Funds reserved for farmers or ranchers under clause (i) for a fiscal year shall be reserved only until March 1 of the fiscal year.
(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.

(Pub. L. 87–128, title III, § 351, as added Pub. L. 99–198, title XIII, § 1320, Dec. 23, 1985, 99 Stat. 1532; amended Pub. L. 100–233, title VI, § 613(b), (c), Jan. 6, 1988, 101 Stat. 1674; Pub. L. 101–508, title I, § 1202(b)(1), (c), Nov. 5, 1990, 104 Stat. 1388–10, 1388–11; Pub. L. 104–105, title II, § 220, Feb. 10, 1996, 110 Stat. 184; Pub. L. 104–127, title VI, § 643(a), Apr. 4, 1996, 110 Stat. 1102; Pub. L. 107–171, title V, § 5313, May 13, 2002, 116 Stat. 347; Pub. L. 115–334, title XII, § 12306(d), Dec. 20, 2018, 132 Stat. 4970.)

CITE AS: 7 USC 1999

§ 2000. Homestead protection
(a) DefinitionsAs 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 (15 U.S.C. 631 et seq.) for any of the purposes authorized for loans under subchapters 1
1 So in original. Probably should be “subchapter”.
I or II.
(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 (15 U.S.C. 631 et seq.); or
(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
2 See References in Text note below.
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 section 2003(e)(2) of this title), the borrower-owner or a member of the immediate family of the borrower-owner shall have a right of first refusal to reacquire the homestead property on such terms and conditions as the Secretary shall determine, except that the Secretary may not demand a payment for the homestead property that is in excess of the current market value of the homestead property as established by an independent appraisal. The independent appraisal shall be conducted by an appraiser selected by the borrower-owner or immediate family member, as the case may be, from a list of three appraisers approved by the county supervisor.
(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.

(Pub. L. 87–128, title III, § 352, as added Pub. L. 99–198, title XIII, § 1321, Dec. 23, 1985, 99 Stat. 1532; amended Pub. L. 100–233, title VI, § 614, Jan. 6, 1988, 101 Stat. 1675; Pub. L. 102–237, title V, § 501(g), title VII, § 701(h)(2), Dec. 13, 1991, 105 Stat. 1867, 1880; Pub. L. 102–552, title V, § 516(i), (j)(1), Oct. 28, 1992, 106 Stat. 4138; Pub. L. 104–127, title VI, § 644, Apr. 4, 1996, 110 Stat. 1103; Pub. L. 110–234, title V, § 5305, May 22, 2008, 122 Stat. 1153; Pub. L. 110–246, § 4(a), title V, § 5305, June 18, 2008, 122 Stat. 1664, 1915.)

CITE AS: 7 USC 2000

§ 2001. Debt restructuring and loan servicing
(a) In generalThe 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 section 1929b of this title, to the maximum extent possible—
(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) EligibilityTo 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 recoveryIn 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 restructured loan, in accordance with paragraph (3).
(2) Recovery valueFor the purpose of paragraph (1), the recovery value of the collateral securing the loan shall be based on—
(A)
(i) the amount of the current appraised value of the interests of the borrower in the property securing the loan; plus
(ii) the value of the interests of the borrower in all other assets that are—(I) not essential for necessary family living expenses;(II) not essential to the operation of the farm; and(III) not exempt from judgment creditors or in a bankruptcy action under Federal or State law; less
(B) the estimated administrative, legal, and other expenses associated with the liquidation and disposition of the loan and collateral, including—
(i) the payment of prior liens;
(ii) taxes and assessments, depreciation, management costs, the yearly percentage decrease or increase in the value of the property, and lost interest income, each calculated for the average holding period for the type of property involved;
(iii) resale expenses, such as repairs, commissions, and advertising; and
(iv) other administrative and attorney’s costs; plus
(C) the value, as determined by the Secretary, of any property not included in subparagraph (A)(i) if the property is specified in any security agreement with respect to such loan and the Secretary determines that the value of such property should be included for purposes of this section.
(3) Value of the restructured loan
(A) In general

For the purpose of paragraph (1), the value of the restructured loan shall be based on the present value of payments that the borrower would make to the Federal Government if the terms of such loan were modified under any combination of primary loan service programs to ensure that the borrower is able to meet such obligations and continue farming operations.

(B) Present value

For the purpose of calculating the present value referred to in subparagraph (A), the Secretary shall use a discount rate of not more than the current rate on 90-day Treasury bills.

(C) Cash flow margin

For the purpose of assessing under subparagraph (A) the ability of a borrower to meet debt obligations and continue farming operations, the Secretary shall assume that the borrower needs up to 110 percent of the amount indicated for payment of farm operating expenses, debt service obligations, and family living expenses.

(4) NotificationWithin 90 days after receipt of a written request for restructuring from the borrower, the Secretary shall—
(A) make the calculations specified in paragraphs (2) and (3);
(B) notify the borrower in writing of the results of such calculations; and
(C) provide documentation for the calculations.
(5) Restructuring of loans

If the value of the restructured loan is greater than or equal to the recovery value, the Secretary shall, within 45 days after notifying the borrower of such calculations, offer to restructure the loan obligations of the borrower under this chapter through primary loan service programs that would enable the borrower to meet the obligations (as modified) under the loan and to continue the farming operations of the borrower. If the borrower accepts such offer, within 45 days after receipt of notice of acceptance, the Secretary shall restructure the loan accordingly.

(6) Termination of loan obligationsThe obligations of a borrower to the Secretary under a loan shall terminate if—
(A) the borrower satisfies the requirements of paragraphs (1) and (2) of subsection (b);
(B) the value of the restructured loan is less than the recovery value; and
(C) not later than 90 days after receipt of the notification described in paragraph (4)(B), the borrower pays (or obtains third-party financing to pay) the Secretary an amount equal to the current market value.
(7) Negotiation of appraisal
(A) In general

In making a determination concerning restructuring under this subsection, the Secretary, at the request of the borrower, shall enter into negotiations concerning appraisals required under this subsection with the borrower.

(B) Independent appraisal

If the borrower, based on a separate current appraisal, objects to the decision of the Secretary regarding an appraisal, the borrower and the Secretary shall mutually agree, to the extent practicable, on an independent appraiser who shall conduct another appraisal of the borrower’s property. The average of the two appraisals that are closest in value shall become the final appraisal under this paragraph. The borrower and the Secretary shall each pay one-half of the cost of the independent appraisal.

(d) Principal and interest write-down
(1) In general
(A) Priority consideration

In selecting the restructuring alternatives to be used in the case of a borrower who has requested restructuring under this section, the Secretary shall give priority consideration to the use of principal and interest write-down, except that this procedure shall not be given first priority in the case of a borrower unless other creditors of such borrower (other than those creditors who are fully collateralized) representing a substantial portion of the total debt of the borrower held by such creditors, agree to participate in the development of the restructuring plan or agree to participate in a State mediation program.

(B) Failure of creditors to agree

Failure of creditors to agree to participate in the restructuring plan or mediation program shall not preclude the use of principal and interest write-down by the Secretary if the Secretary determines that this restructuring alternative results in the least cost to the Secretary.

(2) Participation of creditors

Before eliminating the option to use debt write-down in the case of a borrower, the Secretary shall make a reasonable effort to contact the creditors of such borrower, either directly or through the borrower, and encourage such creditors to participate with the Secretary in the development of a restructuring plan for the borrower.

(e) Shared appreciation arrangements
(1) In general

As a condition of restructuring a loan in accordance with this section, the borrower of the loan may be required to enter into a shared appreciation arrangement that requires the repayment of amounts written off or set aside.

(2) Terms

Shared appreciation agreements shall have a term not to exceed 10 years, and shall provide for recapture based on the difference between the appraised values of the real security property at the time of restructuring and at the time of recapture.

(3) Percentage of recapture

The amount of the appreciation to be recaptured by the Secretary shall be 75 percent of the appreciation in the value of such real security property if the recapture occurs within 4 years of the restructuring, and 50 percent if the recapture occurs during the remainder of the term of the agreement.

(4) Time of recaptureRecapture shall take place at the end of the term of the agreement, or sooner—
(A) on the conveyance of the real security property;
(B) on the repayment of the loans; or
(C) if the borrower ceases farming operations.
(5) Transfer of title

Transfer of title to the spouse of a borrower on the death of such borrower shall not be treated as a conveyance for the purpose of paragraph (4).

(6) Notice of recapture

Beginning with fiscal year 2000 not later than 12 months before the end of the term of a shared appreciation arrangement, the Secretary shall notify the borrower involved of the provisions of the arrangement.

(7) Financing of recapture payment
(A) In general

The Secretary may amortize a recapture payment owed to the Secretary under this subsection.

(B) Term

The term of an amortization under this paragraph may not exceed 25 years.

(C) Interest rate
(i) In general

The interest rate applicable to an amortization under this paragraph may not exceed the rate applicable to a loan to reacquire homestead property less 100 basis points.

(ii) Existing amortizations and loans

The interest rate applicable to an amortization or loan made by the Secretary before October 28, 2000, to finance a recapture payment owed to the Secretary under this subsection may not exceed the rate applicable to a loan to reacquire homestead property less 100 basis points.

(D) Reamortization
(i) In generalThe Secretary may modify the amortization of a recapture payment referred to in subparagraph (A) of this paragraph on which a payment has become delinquent by using loan service tools under section 1991(b)(3) of this title if—(I) the default is due to circumstances beyond the control of the borrower; and(II) the borrower acted in good faith (as determined by the Secretary) in attempting to repay the recapture amount.
(ii) Limitations(I) Term of reamortization

The term of a reamortization under this subparagraph may not exceed 25 years from the date of the original amortization agreement.

(II) No reduction or principal or unpaid interest due

A reamortization of a recapture payment under this subparagraph may not provide for reducing the outstanding principal or unpaid interest due on the recapture payment.

(f) Determination to restructure

If the appeal process results in a determination that a loan is eligible for restructuring, the Secretary shall restructure the loan in the manner consistent with this section, taking into consideration the restructuring recommendations, if any, of the appeals officer.

(g) Prerequisites to foreclosure or liquidationNo foreclosure or other similar actions shall be taken to liquidate any loan determined to be ineligible for restructuring by the Secretary under this section—
(1) until the borrower has been given the opportunity to appeal such decision; and
(2) if the borrower appeals, the appeals process has been completed, and a determination has been made that the loan is ineligible for restructuring.
(h) Time limits for restructuring

Once an appeal has been filed under section 1983b 1

1 See References in Text note below.
of this title, a decision shall be made at each level in the appeals process within 45 days after the receipt of the appeal or request for further review.

(i) Notice of ineligibility for restructuring
(1) In general

A notice of ineligibility for restructuring shall be sent to the borrower by registered or certified mail within 15 days after such determination.

(2) ContentsThe notice required under paragraph (1) shall contain—
(A) the determination and the reasons for the determination;
(B) the computations used to make the determination, including the calculation of the recovery value of the collateral securing the loan; and
(C)
(j) Independent appraisals

An appeal filed with the appeals division under section 1983b of this title may include a request by the borrower for an independent appraisal of any property securing the loan. On such request, the appeals division shall present the borrower with a list of three appraisers approved by the county supervisor, from which the borrower shall select an appraiser to conduct the appraisal, the cost of which shall be borne by the borrower. The results of such appraisal shall be considered in any final determination concerning the loan. A copy of any appraisal made under this paragraph shall be provided to the borrower.

(k) Partial liquidations

If partial liquidations are performed (with the prior consent of the Secretary) as part of loan servicing by a guaranteed lender under this chapter, the Secretary shall not require full liquidation of a delinquent loan in order for the lender to be eligible to receive payment on losses.

(l) Disposition of normal income securityFor purposes of subsection (b)(2) of this section, if a borrower—
(1) disposed of normal income security prior to October 14, 1988, without the consent of the Secretary; and
(2) demonstrates that—
(A) the proceeds were utilized to pay essential household and farm operating expenses; and
(B) the borrower would have been entitled to a release of income proceeds by the Secretary if the regulations in effect on November 28, 1990, had been in effect at the time of the disposition,
the Secretary shall not consider the borrower to have acted without good faith to the extent of the disposition.
(m) Only 1 write-down or net recovery buy-out per borrower for loan made after January 6, 1988
(1) In general

The Secretary may provide for any one borrower not more than 1 write-down or net recovery buy-out under this section with respect to all loans made to the borrower after January 6, 1988.

(2) Special rule

For purposes of paragraph (1), the Secretary shall treat any loan made on or before January 6, 1988, with respect to which a restructuring, write-down, or net recovery buy-out is provided under this section after such date, as a loan made after such date.

(n) Liquidation of assets

The Secretary may not use the authority provided by this section to reduce or terminate any portion of the debt of the borrower that the borrower could pay through the liquidation of assets (or through the payment of the loan value of the assets, if the loan value is greater than the liquidation value) described in subsection (c)(2)(A)(ii).

(o) Lifetime limitation on debt forgiveness per borrower

The Secretary may provide not more than $300,000 in principal and interest forgiveness under this section per borrower.

(Pub. L. 87–128, title III, § 353, as added Pub. L. 100–233, title VI, § 615(a), Jan. 6, 1988, 101 Stat. 1678; amended Pub. L. 101–624, title XVIII, § 1816(a)–(d), (f)–(h), Nov. 28, 1990, 104 Stat. 3826–3828; Pub. L. 102–237, title V, § 501(h), Dec. 13, 1991, 105 Stat. 1868; Pub. L. 104–127, title VI, §§ 645, 661(j), Apr. 4, 1996, 110 Stat. 1103, 1107; Pub. L. 105–277, div. A, § 101(a) [title VIII, §§ 807, 808], Oct. 21, 1998, 112 Stat. 2681, 2681–40; Pub. L. 106–31, title III, § 3019(b), May 21, 1999, 113 Stat. 99; Pub. L. 106–387, § 1(a) [title VIII, § 818(a)], Oct. 28, 2000, 114 Stat. 1549, 1549A–58; Pub. L. 107–171, title V, § 5314, May 13, 2002, 116 Stat. 347.)

CITE AS: 7 USC 2001

§ 2001a. Debt restructuring and loan servicing for community facility loans

The Secretary shall establish and implement a program that is similar to the program established under section 2001 of this title, except that the debt restructuring and loan servicing procedures shall apply to delinquent community facility program loans (rather than delinquent farmer program loans) made by the Farmers Home Administration to a hospital or health care facility under section 1926(a) of this title.

(Pub. L. 87–128, title III, § 353A, as added Pub. L. 101–624, title XXIII, § 2384(a), Nov. 28, 1990, 104 Stat. 4050.)

CITE AS: 7 USC 2001a

§ 2002. Transfer of inventory lands
(a) In generalSubject to subsection (b), the Secretary may transfer to any Federal or State agency, for conservation purposes any real property, or interest therein, administered by the Secretary under this Act—
(1) with respect to which the rights of all prior owners and operators have expired;
(2) that is eligible to be disposed of in accordance with section 1985 of this title; and
(3) that—
(A) has marginal value for agricultural production;
(B) is environmentally sensitive; or
(C) has special management importance.
(b) ConditionsThe Secretary may not transfer any property or interest in property under subsection (a) unless—
(1) at least 2 public notices are given of the transfer;
(2) if requested, at least 1 public meeting is held prior to the transfer; and
(3) the Governor and at least 1 elected county official of the State and county where the property is located are consulted prior to the transfer.
(Pub. L. 87–128, title III, § 354, as added Pub. L. 100–233, title VI, § 616, Jan. 6, 1988, 101 Stat. 1682; amended Pub. L. 104–127, title VI, § 646, Apr. 4, 1996, 110 Stat. 1103.)

CITE AS: 7 USC 2002

§ 2003. Target participation rates
(a) Establishment
(1) In general

The Secretary shall establish annual target participation rates, on a county wide basis, that shall ensure that members of socially disadvantaged groups will receive loans made or insured under subchapter I and will have the opportunity to purchase or lease inventory farmland.

(2) Group population

Except as provided in paragraph (3), in establishing such target rates the Secretary shall take into consideration the portion of the population of the county made up of such groups, and the availability of inventory farmland in such county.

(3) Gender

With respect to gender, target participation rates shall take into consideration the number of current and potential socially disadvantaged farmers and ranchers in a State in proportion to the total number of farmers and ranchers in the State.

(b) Reservation and allocation
(1) Reservation

The Secretary shall, to the greatest extent practicable, reserve sufficient loan funds made available under subchapter I, for use by members of socially disadvantaged groups identified under target participation rates established under subsection (a).

(2) Allocation

The Secretary shall allocate such loans on the basis of the proportion of members of socially disadvantaged groups in a county and the availability of inventory farmland, with the greatest amount of loan funds being distributed in the county with the greatest proportion of socially disadvantaged group members and the greatest amount of available inventory farmland.

(3) Indian reservations

In distributing loan funds in counties within the boundaries of an Indian reservation, the Secretary shall allocate the funds on a reservation-wide basis.

(c) Operating loans
(1) Establishment

The Secretary shall establish annual target participation rates, that shall ensure that socially disadvantaged farmers or ranchers will receive loans made or insured under subchapter II. In establishing such target rates, the Secretary shall consider the number of socially disadvantaged farmers and ranchers in a State in proportion to the total number of farmers and ranchers in that State.

(2) Reservation and allocation

The Secretary shall, to the greatest extent practicable, reserve and allocate the proportion of each State’s loan funds made available under subchapter II that is equal to that State’s target participation rate for use by the socially disadvantaged farmers or ranchers in that State. The Secretary shall, to the extent practicable, distribute the total so derived on a county by county basis according to the number of socially disadvantaged farmers or ranchers in the county. Any funds reserved and allocated under this paragraph but not used within a State shall, to the extent necessary to satisfy pending applications under this chapter, be available for use by socially disadvantaged farmers and ranchers in other States, as determined by the Secretary, and any remaining funds shall be reallocated within the State.

(d) Report

The Secretary shall prepare and submit, to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate, a report that describes the annual target participation rates and the success in meeting such rates.

(e) Definitions
(1) Socially disadvantaged group

As used in this section, the term “socially disadvantaged group” means a group whose members have been subjected to racial, ethnic, or gender prejudice because of their identity as members of a group without regard to their individual qualities.

(2) Socially disadvantaged farmer or rancher

As used in this section, the term “socially disadvantaged farmer or rancher” means a farmer or rancher who is a member of a socially disadvantaged group.

(f) Implementation consistent with Supreme Court holding

Not later than 180 days after April 4, 1996, the Secretary shall ensure that the implementation of this section is consistent with the holding of the Supreme Court in Adarand Constructors, Inc. v. Federico Pena, Secretary of Transportation, 115 S. Ct. 2097 (1995).

(Pub. L. 87–128, title III, § 355, as added Pub. L. 100–233, title VI, § 617, Jan. 6, 1988, 101 Stat. 1682; amended Pub. L. 101–624, title XVIII, § 1817, title XXV, § 2501(f), Nov. 28, 1990, 104 Stat. 3829, 4065; Pub. L. 102–554, § 21(a), (b), Oct. 28, 1992, 106 Stat. 4161; Pub. L. 104–127, title VI, § 647, Apr. 4, 1996, 110 Stat. 1104; Pub. L. 107–171, title V, § 5315, May 13, 2002, 116 Stat. 348.)

CITE AS: 7 USC 2003

§ 2004. Expedited clearing of title to inventory property

The Farmers Home Administration may employ local attorneys, on a case-by-case basis, to process all legal procedures necessary to clear the title to foreclosed properties in the inventory of the Farmers Home Administration. Such attorneys shall be compensated at not more than their usual and customary charges for such work.

(Pub. L. 87–128, title III, § 356, as added Pub. L. 100–233, title VI, § 618, Jan. 6, 1988, 101 Stat. 1683.)

CITE AS: 7 USC 2004

§ 2005. Payment of losses on guaranteed loans
(a) Payments to lenders
(1) Requirement

Within 3 months after a court of competent jurisdiction confirms a plan of reorganization under chapter 12 of title 11, for any borrower to whom a lender has made a loan guaranteed under this chapter, the Secretary shall pay the lender an amount estimated by the Secretary to be equal to the loss incurred by the lender for purposes of the guarantee.

(2) Payment toward loan guarantee

Any amount paid to a lender under this subsection with respect to a loan guaranteed under this chapter shall be treated as payment towards satisfaction of the loan guarantee.

(b) Administration
(1) Loss by lender
If the lender of a guaranteed farmer program loan takes any action described in section 1981(b)(4) of this title with respect to the loan and the Secretary approves such action, then, for purposes of the guarantee, the lender shall be treated as having sustained a loss equal to the amount by which—
(A) the outstanding balance of the loan immediately before such action, exceeds
(B) the outstanding balance of the loan immediately after such action.
(2) Net present value of loan
The Secretary shall approve the taking of an action described in section 1981(b)(4) of this title by the lender of a guaranteed farmer program loan with respect to the loan if such action reduces the net present value of the loan to an amount equal to not less than the greater of—
(A) the greatest net present value of a loan the borrower could reasonably be expected to repay; and
(B) the greatest amount that the lender of the loan could reasonably expect to recover from the borrower through bankruptcy, or liquidation of the property securing the loan, less all reasonable and necessary costs and expenses that the lender of the loan could reasonably expect to incur to preserve or dispose of such property (including all associated legal and property management costs) in the course of such a bankruptcy or liquidation.
(3) Construction of subsection

This subsection shall not be construed to limit the authority of the Secretary to enter into a shared appreciation arrangement with a borrower, or the terms and conditions which shall be required of a borrower, under section 2001(e) of this title.

(Pub. L. 87–128, title III, § 357, as added Pub. L. 100–233, title VI, § 619, Jan. 6, 1988, 101 Stat. 1683; amended Pub. L. 101–624, title XXIII, § 2388(d)(2), Nov. 28, 1990, 104 Stat. 4053.)

CITE AS: 7 USC 2005

§ 2006. Waiver of mediation rights by borrowers

The Secretary may not make, insure, or guarantee any farmer program loan to a farm borrower on the condition that the borrower waive any right under the mediation program of any State.

(Pub. L. 87–128, title III, § 358, as added Pub. L. 100–233, title V, § 512, Jan. 6, 1988, 101 Stat. 1664; amended Pub. L. 103–354, title II, § 282(f)(3), Oct. 13, 1994, 108 Stat. 3235.)

CITE AS: 7 USC 2006

§ 2006a. Borrower training
(a) In general

The Secretary shall enter into contracts to provide educational training to all borrowers of farmer program direct loans made under this chapter in financial and farm management concepts associated with commercial farming.

(b) Contract
(1) In general

The Secretary may contract with State or private providers of farm management and credit counseling services (including a community college, the extension service of a State, a State department of agriculture, or a nonprofit organization) to carry out this section.

(2) Consultation

The Secretary may consult with the chief executive officer of a State concerning the identity of the contracting organization and the process for contracting.

(c) Eligibility for loans
(1) In general

Subject to paragraph (2), to be eligible to obtain a direct loan under this chapter, a borrower must obtain management assistance under this section, appropriate to the management ability of the borrower (as determined by the appropriate county committee during the determination of eligibility for the loan).

(2) Loan conditions

The need of a borrower who satisfies the criteria set out in section 1922(a)(1)(B) or 1941(a)(1)(B) of this title for management assistance under this section shall not be cause for denial of eligibility of the borrower for a direct loan under this chapter.

(d) Guidelines and curriculum

The Secretary shall issue regulations establishing guidelines and curriculum for the borrower training program established under this section.

(e) Payment

A borrower shall pay for training received under this section, and may use funds from operating loans made under subchapter II to pay for the training.

(f) Waivers
(1) In general

The Secretary may waive the requirements of this section for an individual borrower if the Secretary determines that the borrower demonstrates adequate knowledge in areas described in this section.

(2) Criteria

The Secretary shall establish criteria providing for the application of paragraph (1) consistently in all counties nationwide.

(Pub. L. 87–128, title III, § 359, as added Pub. L. 101–624, title XVIII, § 1818(a), Nov. 28, 1990, 104 Stat. 3829; amended Pub. L. 105–277, div. A, § 101(a) [title VIII, § 805(3)], Oct. 21, 1998, 112 Stat. 2681, 2681–39; Pub. L. 107–171, title V, §§ 5316, 5501(c), May 13, 2002, 116 Stat. 348, 351; Pub. L. 113–79, title V, § 5306, Feb. 7, 2014, 128 Stat. 840.)

CITE AS: 7 USC 2006a

§ 2006b. Loan assessments
(a) In general

The Secretary shall evaluate, in accordance with regulations issued by the Secretary, the farming plan and financial situation of each qualified farmer or rancher applicant.

(b) Determinations
In evaluating the farming plan and financial situation of an applicant under this section, the Secretary shall determine—
(1) the amount that the applicant will need to borrow to carry out the proposed farming plan;
(2) the rate of interest that the applicant would need to be able to cover expenses and build an adequate equity base;
(3) the goals of the proposed farming plan of the applicant;
(4) the financial viability of the plan and any changes that are necessary to make the plan viable; and
(5) whether assistance is necessary under this chapter and, if so, the amount of the assistance.
(c) Contract

The Secretary may contract with a third party (including those entities eligible to provide borrower training under section 2006a(b) of this title) to conduct loan assessments under this section.

(d) Review of loans
(1) In general

Loan assessments conducted under this section shall include annual review of direct loans, and periodic review (as determined necessary by the Secretary) of guaranteed loans, made under this chapter to assess the progress of a borrower in meeting the goals for the farm or ranch operation.

(2) Contracts

The Secretary may contract with an entity that is eligible to provide borrower training under section 2006a(b) of this title to conduct loan reviews under paragraph (1).

(3) Problem assessments

If a borrower is delinquent in payments on a direct or guaranteed loan made under this chapter, the Secretary or the contracting entity shall determine the cause of, and action necessary to correct, the delinquency.

(e) Guidelines

The Secretary shall issue regulations providing guidelines for loan assessments conducted under this section.

(Pub. L. 87–128, title III, § 360, as added Pub. L. 101–624, title XVIII, § 1819, Nov. 28, 1990, 104 Stat. 3830; amended Pub. L. 107–171, title V, §§ 5317, 5318, May 13, 2002, 116 Stat. 348.)

CITE AS: 7 USC 2006b

§ 2006c. Supervised credit
The Secretary shall provide adequate training to employees of the Farmers Home Administration on credit analysis and financial and farm management to—
(1) better acquaint the employees with what constitutes adequate financial data on which to base a direct or guaranteed loan approval decision; and
(2) ensure proper supervision of farmer program loans.
(Pub. L. 87–128, title III, § 361, as added Pub. L. 101–624, title XVIII, § 1820, Nov. 28, 1990, 104 Stat. 3830.)

CITE AS: 7 USC 2006c

§ 2006d. Market placement

The Secretary shall establish a market placement program for qualified beginning farmers and ranchers and other borrowers of farmer program loans that the Secretary believes have a reasonable chance of qualifying for commercial credit with a guarantee provided under this chapter.

(Pub. L. 87–128, title III, § 362, as added Pub. L. 101–624, title XVIII, § 1821, Nov. 28, 1990, 104 Stat. 3831.)

CITE AS: 7 USC 2006d

§ 2006e. Prohibition on use of loans for certain purposes

The Secretary shall not approve any loan under this chapter to drain, dredge, fill, level, or otherwise manipulate a wetland (as defined in section 3801(a)(16) 1

1 See References in Text note below.
of title 16), or to engage in any activity that results in impairing or reducing the flow, circulation, or reach of water, except in the case of activity related to the maintenance of previously converted wetlands, or in the case of such activity that is already commenced before November 28, 1990. This section shall not apply to a loan made or guaranteed under this chapter for a utility line.

(Pub. L. 87–128, title III, § 363, as added Pub. L. 101–624, title XVIII, § 1824, Nov. 28, 1990, 104 Stat. 3831; amended Pub. L. 102–237, title V, § 501(i), Dec. 13, 1991, 105 Stat. 1868; Pub. L. 104–127, title VII, § 751, Apr. 4, 1996, 110 Stat. 1129.)

CITE AS: 7 USC 2006e

§ 2006f. Rural development certified lenders program
(a) Certified lenders program
(1) In general

The Secretary may establish a program under which the Secretary may guarantee a loan for any rural development program that is made by a lender certified by the Secretary.

(2) Certification requirements

The Secretary may certify a lender if the lender meets such criteria as the Secretary may prescribe in regulations, including the ability of the lender to properly make, service, and liquidate the guaranteed loans of the lender.

(3) Condition of certification

As a condition of certification, the Secretary may require the lender to undertake to service the guaranteed loan using standards that are not less stringent than generally accepted banking standards concerning loan servicing that are used by prudent commercial or cooperative lenders.

(4) Guarantee

Notwithstanding any other provision of law, the Secretary may guarantee not more than 80 percent of a loan made by a certified lender described in paragraph (1), if the borrower of the loan meets the eligibility requirements and such other criteria for the loan guarantee that are established by the Secretary.

(5) Certifications
With respect to loans to be guaranteed, the Secretary may permit a certified lender to make appropriate certifications (as provided in regulations issued by the Secretary)—
(A) relating to issues such as creditworthiness, repayment ability, adequacy of collateral, and feasibility of the operation; and
(B) that the borrower is in compliance with all requirements of law, including regulations issued by the Secretary.
(6) Relationship to other requirements

This subsection shall not affect the responsibility of the Secretary to determine eligibility, review financial information, and otherwise assess an application.

(b) Preferred certified lenders program
(1) In general
The Secretary may establish a preferred certified lenders program for lenders who establish their—
(A) knowledge of, and experience under, the program established under subsection (a);
(B) knowledge of the regulations concerning the particular guaranteed loan program; and
(C) proficiency related to the certified lender program requirements.
(2) Additional lending institutions

The Secretary may certify any lending institution as a preferred certified lender if the institution meets such additional criteria as the Secretary may prescribe by regulation.

(3) Revocation of designation

The designation of a lender as a preferred certified lender shall be revoked if the Secretary determines that the lender is not adhering to the rules and regulations applicable to the program or if the loss experiences of the preferred certified lender are greater than other preferred certified lenders, except that the suspension or revocation shall not affect any outstanding guarantee.

(4) Condition of certification

As a condition of the preferred certification, the Secretary shall require the lender to undertake to service the loan 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 the certification are being met.

(5) Effect of preferred lender certification
Notwithstanding any other provision of law, the Secretary may—
(A) guarantee not more than 80 percent of any approved loan made by a preferred certified lender as described in this subsection, if the borrower meets the eligibility requirements and such other criteria as may be applicable to loans guaranteed by the Secretary; and
(B) permit preferred certified lenders to make all decisions, with respect to loans to be guaranteed by the Secretary under this subsection relating to creditworthiness, the closing, monitoring, collection, and liquidation of loans, and to accept appropriate certifications, as provided in regulations issued by the Secretary, that the borrower is in compliance with all requirements of law and regulations issued by the Secretary.
(Pub. L. 87–128, title III, § 364, as added Pub. L. 104–127, title VII, § 752, Apr. 4, 1996, 110 Stat. 1129.)

CITE AS: 7 USC 2006f

§§ 2007 to 2007e. Repealed. Pub. L. 104–127, title VII, § 701, Apr. 4, 1996, 110 Stat. 1108

CITE AS: 7 USC 2007 to 2007e

§ 2008. Rural development and farm loan program activities

The Secretary may not complete a study of, or enter into a contract with a private party to carry out, without specific authorization in a subsequent Act of Congress, a competitive sourcing activity of the Secretary, including support personnel of the Department of Agriculture, relating to rural development or farm loan programs.

(Pub. L. 87–128, title III, § 365, as added Pub. L. 110–234, title V, § 5306, May 22, 2008, 122 Stat. 1153, and Pub. L. 110–246, § 4(a), title V, § 5306, June 18, 2008, 122 Stat. 1664, 1915.)

CITE AS: 7 USC 2008

§ 2008a. Equitable relief
(a) In general
Subject to subsection (b), the Secretary may provide a form of relief described in subsection (c) to any farmer or rancher who—
(1) received a direct farm ownership, operating, or emergency loan under this chapter; and
(2) the Secretary determines is not in compliance with the requirements of this chapter with respect to the loan.
(b) Limitation
The Secretary may only provide relief to a farmer or rancher under subsection (a) if the Secretary determines that the farmer or rancher—
(1) acted in good faith; and
(2) relied on an action of, or the advice of, the Secretary (including any authorized representative of the Secretary) to the detriment of the farming or ranching operation of the farmer or rancher.
(c) Forms of relief
The Secretary may provide to a farmer or rancher under subsection (a) any of the following forms of relief:
(1) The farmer or rancher may retain loans or other benefits received in association with the loan with respect to which the farmer or rancher was determined to be noncompliant under subsection (a)(2).
(2) The farmer or rancher may receive such other equitable relief as the Secretary determines to be appropriate.
(d) Condition

As a condition of receiving relief under this section, the Secretary may require the farmer or rancher to take actions designed to remedy the noncompliance.

(e) Administrative appeal; judicial review
A determination or action of the Secretary under this section—
(1) shall be final; and
(2) shall not be subject to administrative appeal or judicial review under chapter 7 of title 5.
(Pub. L. 87–128, title III, § 366, as added Pub. L. 115–334, title V, § 5305, Dec. 20, 2018, 132 Stat. 4672.)

CITE AS: 7 USC 2008a

§ 2008b. Socially disadvantaged farmers and ranchers; qualified beginning farmers and ranchers

In the case of a loan guaranteed by the Secretary under subchapter I or II to a socially disadvantaged farmer or rancher (as defined in section 2003(e) of this title) or a qualified beginning farmer or rancher, the Secretary may provide for a standard guarantee plan, which shall cover an amount equal to 95 percent of the outstanding principal of the loan.

(Pub. L. 87–128, title III, § 367, as added Pub. L. 115–334, title V, § 5306, Dec. 20, 2018, 132 Stat. 4673.)

CITE AS: 7 USC 2008b

§ 2008c. Rural Business-Cooperative Service programs technical assistance and training
(a) In general

The Secretary may make grants to public bodies, private nonprofit corporations, economic development authorities, institutions of higher education, federally recognized Indian Tribes, and rural cooperatives for the purpose of providing or obtaining technical assistance and training to support funding applications for programs carried out by the Secretary, acting through the Administrator of the Rural Business-Cooperative Service.

(b) Purposes
A grant under subsection (a) may be used—
(1) to assist communities in identifying and planning for business and economic development needs;
(2) to identify public and private resources to finance business and small and emerging business needs;
(3) to prepare reports and surveys necessary to request financial assistance for businesses in rural communities; and
(4) to prepare applications for financial assistance.
(c) Selection priority

In selecting recipients of grants under this section, the Secretary shall give priority to grants serving persistent poverty counties and high poverty communities, as determined by the Secretary.

(d) Funding
(1) In general

There is authorized to be appropriated to carry out this section $5,000,000 for each of fiscal years 2019 through 2023, to remain available until expended.

(2) Availability

Any amounts authorized to be appropriated under paragraph (1) for any fiscal year that are not appropriated for that fiscal year may be appropriated for the immediately succeeding fiscal year.

(Pub. L. 87–128, title III, § 368, as added Pub. L. 115–334, title VI, § 6419, Dec. 20, 2018, 132 Stat. 4764.)

CITE AS: 7 USC 2008c

§ 2008d. Recordkeeping of loans by borrower’s gender

The Secretary shall classify, by gender, records of applicants for loans and loan guarantees under this chapter.

(Pub. L. 87–128, title III, § 369, as added Pub. L. 102–554, § 21(c), Oct. 28, 1992, 106 Stat. 4161.)

CITE AS: 7 USC 2008d

§ 2008e. Prohibition under rural development programs
(a) Prohibition

Assistance under any rural development program administered by the Rural Development Administration, the Farmers Home Administration, the Rural Electrification Administration, or any other agency of the Department of Agriculture shall not be conditioned on any requirement that the recipient of such assistance accept or receive electric service from any particular utility, supplier, or cooperative.

(b) Ensuring compliance

The Secretary shall establish, by regulation, adequate safeguards to ensure that assistance under such rural development programs is not subject to such a condition. Such safeguards shall include periodic certifications and audits, and appropriate measures and sanctions against any person violating, or attempting to violate, the prohibition in subsection (a).

(c) Regulations

Not later than 6 months after November 1, 1993, the Secretary shall issue interim final regulations to ensure compliance with subsection (a).

(Pub. L. 87–128, title III, § 370, as added Pub. L. 103–129, § 5, Nov. 1, 1993, 107 Stat. 1366.)

CITE AS: 7 USC 2008e

§ 2008f. Crop insurance requirement
(a) In general

As a condition of obtaining any benefit (including a direct loan, loan guarantee, or payment) described in subsection (b), a borrower must obtain at least catastrophic risk protection insurance coverage under section 1508 of this title for the crop and crop year for which the benefit is sought, if the coverage is offered by the Corporation.

(b) Applicable benefits
Subsection (a) shall apply to—
(1) a farm ownership loan (FO) under section 1923 of this title;
(2) an operating loan (OL) under section 1942 of this title; and
(3) an emergency loan (EM) under section 1961 of this title.
(Pub. L. 87–128, title III, § 371, as added Pub. L. 103–354, title I, § 119(b), Oct. 13, 1994, 108 Stat. 3208.)

CITE AS: 7 USC 2008f

§ 2008g. Payment of interest as condition of loan servicing for borrowers

The Secretary may not reschedule or reamortize a loan for a borrower under this chapter who has not requested consideration under section 1981d(e) of this title unless the borrower pays a portion, as determined by the Secretary, of the interest due on the loan.

(Pub. L. 87–128, title III, § 372, as added Pub. L. 104–127, title VI, § 648(a), Apr. 4, 1996, 110 Stat. 1104.)

CITE AS: 7 USC 2008g

§ 2008h. Loan and loan servicing limitations
(a) Delinquent borrowers prohibited from obtaining direct operating loans

The Secretary may not make a direct operating loan under subchapter II to a borrower who is delinquent on any loan made or guaranteed under this chapter.

(b) Prohibition of loans for borrowers that have received debt forgiveness
(1) ProhibitionsExcept as provided in paragraph (2)—
(A) the Secretary may not make a loan under this chapter to a borrower that has received debt forgiveness on a loan made or guaranteed under this chapter; and
(B) the Secretary may not guarantee a loan under this chapter to a borrower that has received—
(i) debt forgiveness after April 4, 1996, on a loan made or guaranteed under this chapter; or
(ii) received debt forgiveness on more than 3 occasions on or before April 4, 1996.
(2) Exceptions
(A) In generalThe Secretary may make a direct or guaranteed farm operating loan for paying annual farm or ranch operating expenses of a borrower who—
(i) was restructured with a write-down under section 2001 of this title;
(ii) is current on payments under a confirmed reorganization plan under chapters 1
1 So in original. Probably should be “chapter”.
11, 12, or 13 of title 11; or
(iii) received debt forgiveness on not more than 1 occasion resulting directly and primarily from a major disaster or emergency designated by the President on or after April 4, 1996, under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).
(B) Emergency loans
(i) In generalThe Secretary may make an emergency loan under section 1961 of this title to a borrower that—(I) on or before April 4, 1996, received not more than 1 debt forgiveness on a loan made or guaranteed under this chapter; and(II) after April 4, 1996, has not received debt forgiveness on a loan made or guaranteed under this chapter.
(ii) Restructured loans

For purposes of clause (i), a borrower who was restructured with a write-down or restructuring under section 2001 of this title shall not be considered to have received debt forgiveness on a loan made or guaranteed under this chapter.

(c) No more than 1 debt forgiveness for borrower on direct loan

The Secretary may not provide to a borrower debt forgiveness on a direct loan made under this chapter if the borrower has received debt forgiveness on another direct loan made under this chapter.

(Pub. L. 87–128, title III, § 373, as added Pub. L. 104–127, title VI, § 648(b), Apr. 4, 1996, 110 Stat. 1104; amended Pub. L. 105–277, div. A, § 101(a) [title VIII, § 801], Oct. 21, 1998, 112 Stat. 2681, 2681–37; Pub. L. 107–171, title V, § 5319, May 13, 2002, 116 Stat. 348; Pub. L. 115–334, title V, § 5307, Dec. 20, 2018, 132 Stat. 4673.)

CITE AS: 7 USC 2008h

§ 2008i. Short form certification of farm program borrower compliance

The Secretary shall develop and utilize a consolidated short form for farm program borrowers to use in certifying compliance with any applicable provision of law (including a regulation) that serves as an eligibility prerequisite for a loan made under this chapter.

(Pub. L. 87–128, title III, § 374, as added Pub. L. 104–127, title VI, § 649, Apr. 4, 1996, 110 Stat. 1105.)

CITE AS: 7 USC 2008i

§ 2008j. Transferred

CITE AS: 7 USC 2008j

§ 2008k. Making and servicing of loans by personnel of State, county, or area committees

The Secretary shall use personnel of a State, county or area committee established under section 590h(b)(5) of title 16 to make and service loans under this chapter to the extent the personnel have been trained to do so.

(Pub. L. 87–128, title III, § 376, as added Pub. L. 107–171, title V, § 5320, May 13, 2002, 116 Stat. 349.)

CITE AS: 7 USC 2008k

§ 2008l. Eligibility of employees of State, county, or area committee for loans and loan guarantees
(a) In general

The Secretary shall not prohibit an employee of a State, county or area committee established under section 590h(b)(5) of title 16 or an employee of the Department of Agriculture from obtaining a loan or loan guarantee under subchapter I, II or III of this chapter.

(b) Approvals
(1) County or area office

In the case of a loan application from an employee in a county or area office, the Farm Service Agency State office shall be responsible for reviewing and approving the application.

(2) State office

In the case of a loan application from an employee of a State office, the Farm Service Agency national office shall be responsible for reviewing and approving the application.

(Pub. L. 87–128, title III, § 377, as added Pub. L. 107–171, title V, § 5321, May 13, 2002, 116 Stat. 349.)

CITE AS: 7 USC 2008l

§ 2008m. National Rural Development Partnership
(a) DefinitionsIn this section:
(1) Agency with rural responsibilities

The term “agency with rural responsibilities” means any executive agency (as defined in section 105 of title 5) that implements a Federal law, or administers a program, targeted at or having a significant impact on rural areas.

(2) Coordinating Committee

The term “Coordinating Committee” means the National Rural Development Coordinating Committee established by subsection (c).

(3) Partnership

The term “Partnership” means the National Rural Development Partnership continued by subsection (b).

(4) State rural development council

The term “State rural development council” means a State rural development council that meets the requirements of subsection (d).

(b) Partnership
(1) In generalThe Secretary shall continue the National Rural Development Partnership composed of—
(A) the Coordinating Committee; and
(B) State rural development councils.
(2) Purposes

The purposes of the Partnership are to empower and build the capacity of States and rural communities to design flexible and innovative responses to their own special rural development needs, with local determinations of progress and selection of projects and activities.

(3) Governing panel
(A) In general

A panel consisting of representatives of the Coordinating Committee and State rural development councils shall be established to lead and coordinate the strategic operation, policies, and practices of the Partnership.

(B) Annual reports

In conjunction with the Coordinating Committee and State rural development councils, the panel shall prepare and submit to Congress an annual report on the activities of the Partnership.

(4) Role of Federal GovernmentThe role of the Federal Government in the Partnership may be that of a partner and facilitator, with Federal agencies authorized—
(A) to cooperate with States to implement the Partnership;
(B) to provide States with the technical and administrative support necessary to plan and implement tailored rural development strategies to meet local needs;
(C) to ensure that the head of each agency with rural responsibilities designates a senior-level agency official to represent the agency on the Coordinating Committee and directs appropriate field staff to participate fully with the State rural development council within the jurisdiction of the field staff; and
(D) to enter into cooperative agreements with, and to provide grants and other assistance to, the Coordinating Committee and State rural development councils.
(c) National Rural Development Coordinating Committee
(1) Establishment

The Secretary shall establish a National Rural Development Coordinating Committee within the Department of Agriculture.

(2) CompositionThe Coordinating Committee shall be composed of—
(A) 1 representative of each agency with rural responsibilities; and
(B) representatives, approved by the Secretary, of—
(i) national associations of State, regional, local, and tribal governments and intergovernmental and multijurisdictional agencies and organizations;
(ii) national public interest groups;
(iii) other national nonprofit organizations that elect to participate in the activities of the Coordinating Committee; and
(iv) the private sector.
(3) DutiesThe Coordinating Committee shall—
(A) support the work of the State rural development councils;
(B) facilitate coordination of rural development policies, programs, and activities among Federal agencies and with those of State, local, and tribal governments, the private sector, and nonprofit organizations;
(C) review and comment on policies, regulations, and proposed legislation that affect or would affect rural areas and gather and provide related information;
(D) develop and facilitate strategies to reduce or eliminate administrative and regulatory impediments; and
(E) require each State rural development council receiving funds under this section to submit an annual report on the use of the funds, including a description of strategic plans, goals, performance measures, and outcomes for the State rural development council of the State.
(4) Federal participation in Coordinating Committee
(A) In general

A Federal employee shall fully participate in the governance and operations of the Coordinating Committee, including activities related to grants, contracts, and other agreements, in accordance with this section.

(B) Conflicts

Participation by a Federal employee in the Coordinating Committee in accordance with this paragraph shall not constitute a violation of section 205 or 208 of title 18.

(5) Administrative support

The Secretary may provide such administrative support for the Coordinating Committee as the Secretary determines is necessary to carry out the duties of the Coordinating Committee.

(6) Procedures

The Secretary may prescribe such regulations, bylaws, or other procedures as are necessary for the operation of the Coordinating Committee.

(d) State rural development councils
(1) Establishment

Notwithstanding chapter 63 of title 31, each State may elect to participate in the Partnership by entering into an agreement with the Secretary to recognize a State rural development council.

(2) CompositionA State rural development council shall—
(A) be composed of representatives of Federal, State, local, and tribal governments, nonprofit organizations, regional organizations, the private sector, and other entities committed to rural advancement; and
(B) have a nonpartisan and nondiscriminatory membership that—
(i) is broad and representative of the economic, social, and political diversity of the State; and
(ii) shall be responsible for the governance and operations of the State rural development council.
(3) DutiesA State rural development council shall—
(A) facilitate collaboration among Federal, State, local, and tribal governments and the private and nonprofit sectors in the planning and implementation of programs and policies that have an impact on rural areas of the State;
(B) monitor, report, and comment on policies and programs that address, or fail to address, the needs of the rural areas of the State;
(C) as part of the Partnership, in conjunction with the Coordinating Committee, facilitate the development of strategies to reduce or eliminate conflicting or duplicative administrative or regulatory requirements of Federal, State, local, and tribal governments; and
(D)
(i) provide to the Coordinating Committee an annual plan with goals and performance measures; and
(ii) submit to the Coordinating Committee an annual report on the progress of the State rural development council in meeting the goals and measures.
(4) Federal participation in State rural development councils
(A) In general

A State Director for Rural Development of the Department of Agriculture, other employees of the Department, and employees of other Federal agencies with rural responsibilities shall fully participate as voting members in the governance and operations of State rural development councils (including activities related to grants, contracts, and other agreements in accordance with this section) on an equal basis with other members of the State rural development councils.

(B) Conflicts

Participation by a Federal employee in a State rural development council in accordance with this paragraph shall not constitute a violation of section 205 or 208 of title 18.

(e) Administrative support of the Partnership
(1) Detail of employees
(A) In general

In order to provide experience in intergovernmental collaboration, the head of an agency with rural responsibilities that elects to participate in the Partnership may, and is encouraged to, detail to the Secretary for the support of the Partnership 1 or more employees of the agency with rural responsibilities without reimbursement for a period of up to 1 year.

(B) Civil service status

The detail shall be without interruption or loss of civil service status or privilege.

(2) Additional support

The Secretary may provide for any additional support staff to the Partnership as the Secretary determines to be necessary to carry out the duties of the Partnership.

(3) Intermediaries

The Secretary may enter into a contract with a qualified intermediary under which the intermediary shall be responsible for providing administrative and technical assistance to a State rural development council, including administering the financial assistance available to the State rural development council.

(f) Matching requirements for State rural development councils
(1) In general

Except as provided in paragraph (2), a State rural development council shall provide matching funds, or in-kind goods or services, to support the activities of the State rural development council in an amount that is not less than 33 percent of the amount of Federal funds received from a Federal agency under subsection (g)(2).

(2) Exceptions to matching requirement for certain Federal fundsParagraph (1) shall not apply to funds, grants, funds provided under contracts or cooperative agreements, gifts, contributions, or technical assistance received by a State rural development council from a Federal agency that are used—
(A) to support 1 or more specific program or project activities; or
(B) to reimburse the State rural development council for services provided to the Federal agency providing the funds, grants, funds provided under contracts or cooperative agreements, gifts, contributions, or technical assistance.
(3) Department’s share

The Secretary shall develop a plan to decrease, over time, the share of the Department of Agriculture of the cost of the core operations of State rural development councils.

(g) Funding
(1) Authorization of appropriations

There is authorized to be appropriated to carry out this section $10,000,000 for each of fiscal years 2008 through 2023.

(2) Federal agencies
(A) In general

Notwithstanding any other provision of law limiting the ability of an agency, along with other agencies, to provide funds to the Coordinating Committee or a State rural development council in order to carry out the purposes of this section, a Federal agency may make grants, gifts, or contributions to, provide technical assistance to, or enter into contracts or cooperative agreements with, the Coordinating Committee or a State rural development council.

(B) Assistance

Federal agencies are encouraged to use funds made available for programs that have an impact on rural areas to provide assistance to, and enter into contracts with, the Coordinating Committee or a State rural development council, as described in subparagraph (A).

(3) Contributions

The Coordinating Committee and a State rural development council may accept private contributions.

(h) Termination

The authority provided under this section shall terminate on September 30, 2023.

(Pub. L. 87–128, title III, § 378, as added Pub. L. 107–171, title VI, § 6021, May 13, 2002, 116 Stat. 363; amended Pub. L. 110–234, title VI, § 6019, May 22, 2008, 122 Stat. 1172; Pub. L. 110–246, § 4(a), title VI, § 6019, June 18, 2008, 122 Stat. 1664, 1933; Pub. L. 113–79, title VI, § 6021, Feb. 7, 2014, 128 Stat. 847; Pub. L. 115–334, title VI, § 6420, Dec. 20, 2018, 132 Stat. 4765.)

CITE AS: 7 USC 2008m

§ 2008n. Repealed. Pub. L. 115–334, title VI, § 6601(a)(1)(C), Dec. 20, 2018, 132 Stat. 4775

CITE AS: 7 USC 2008n

§ 2008o. Repealed. Pub. L. 115–334, title VI, § 6601(a)(1)(D), Dec. 20, 2018, 132 Stat. 4775

CITE AS: 7 USC 2008o

§ 2008p. Grants for NOAA weather radio transmitters
(a) In general

The Secretary, acting through the Administrator of the Rural Utilities Service, may make grants to public and nonprofit entities, and borrowers of loans made by the Rural Utilities Service, for the Federal share of the cost of acquiring radio transmitters to increase coverage of rural areas by the all hazards weather radio broadcast system of the National Oceanic and Atmospheric Administration.

(b) Eligibility
To be eligible for a grant under this section, an applicant shall provide to the Secretary—
(1) a binding commitment from a tower owner to place the transmitter on a tower; and
(2) a description of how the tower placement will increase coverage of a rural area by the all hazards weather radio broadcast system of the National Oceanic and Atmospheric Administration.
(c) Federal share

A grant provided under this section shall be not more than 75 percent of the total cost of acquiring a radio transmitter, as described in subsection (a).

(d) Authorization of appropriations

There is authorized to be appropriated to carry out this section $1,000,000 for each of fiscal years 2014 through 2023.

(Pub. L. 87–128, title III, § 379B, as added Pub. L. 107–171, title VI, § 6024, May 13, 2002, 116 Stat. 371; amended Pub. L. 110–234, title VI, § 6021, May 22, 2008, 122 Stat. 1172; Pub. L. 110–246, § 4(a), title VI, § 6021, June 18, 2008, 122 Stat. 1664, 1934; Pub. L. 113–79, title VI, § 6022, Feb. 7, 2014, 128 Stat. 848; Pub. L. 115–334, title VI, § 6421, Dec. 20, 2018, 132 Stat. 4765.)

CITE AS: 7 USC 2008p

§ 2008q. Repealed. Pub. L. 115–334, title VI, § 6601(a)(1)(E), Dec. 20, 2018, 132 Stat. 4775

CITE AS: 7 USC 2008q

§ 2008q–1. Grants to improve supply, stability, safety, and training of agricultural labor force
(a) Definition of eligible entity

In this section, the term “eligible entity” means an entity described in section 2008q(a) 1

1 See References in Text note below.
of this title.

(b) Grants
(1) In general

To assist agricultural employers and farmworkers by improving the supply, stability, safety, and training of the agricultural labor force, the Secretary may provide grants to eligible entities for use in providing services to assist farmworkers who are citizens or otherwise legally present in the United States in securing, retaining, upgrading, or returning from agricultural jobs.

(2) Eligible services
The services referred to in paragraph (1) include—
(A) agricultural labor skills development;
(B) the provision of agricultural labor market information;
(C) transportation;
(D) short-term housing while in transit to an agricultural worksite;
(E) workplace literacy and assistance with English as a second language;
(F) health and safety instruction, including ways of safeguarding the food supply of the United States; and
(G) such other services as the Secretary determines to be appropriate.
(c) Limitation on administrative expenses

Not more than 15 percent of the funds made available to carry out this section for a fiscal year may be used to pay for administrative expenses.

(d) Authorization of appropriations
There are authorized to be appropriated to carry out this section—
(1) such sums as are necessary for each of fiscal years 2008 through 2013; and
(2) $10,000,000 for each of fiscal years 2014 through 2018.
(Pub. L. 110–234, title XIV, § 14204, May 22, 2008, 122 Stat. 1459; Pub. L. 110–246, § 4(a), title XIV, § 14204, June 18, 2008, 122 Stat. 1664, 2221; Pub. L. 113–79, title XII, § 12301, Feb. 7, 2014, 128 Stat. 984.)

CITE AS: 7 USC 2008q-1

§ 2008r. Repealed. Pub. L. 115–334, title VI, § 6601(a)(1)(F), Dec. 20, 2018, 132 Stat. 4776

CITE AS: 7 USC 2008r

§ 2008s. Rural microentrepreneur assistance program
(a) DefinitionsIn this section:
(1) Indian tribe

The term “Indian tribe” has the meaning given the term in section 5304 of title 25.

(2) Microentrepreneur

The term “microentrepreneur” means an owner and operator, or prospective owner and operator, of a rural microenterprise who is unable to obtain sufficient training, technical assistance, or credit other than under this section, as determined by the Secretary.

(3) Microenterprise development organizationThe term “microenterprise development organization” means an organization that—
(A) is—
(i) a nonprofit entity;
(ii) an Indian tribe, the tribal government of which certifies to the Secretary that—(I) no microenterprise development organization serves the Indian tribe; and(II) no rural microentrepreneur assistance program exists under the jurisdiction of the Indian tribe; or
(iii) a public institution of higher education;
(B) provides training and technical assistance to rural microentrepreneurs;
(C) facilitates access to capital or another service described in subsection (b) for rural microenterprises; and
(D) has a demonstrated record of delivering services to rural microentrepreneurs, or an effective plan to develop a program to deliver services to rural microentrepreneurs, as determined by the Secretary.
(4) Microloan

The term “microloan” means a business loan of not more than $50,000 that is provided to a rural microenterprise.

(5) Program

The term “program” means the rural microentrepreneur assistance program established under subsection (b).

(6) Rural microenterpriseThe term “rural microenterprise” means—
(A) a sole proprietorship located in a rural area; or
(B) a business entity with not more than 10 full-time-equivalent employees located in a rural area.
(b) Rural microentrepreneur assistance program
(1) Establishment

The Secretary shall establish a rural microentrepreneur assistance program to provide loans and grants to support microentrepreneurs in the development and ongoing success of rural microenterprises.

(2) PurposeThe purpose of the program is to provide microentrepreneurs with—
(A) the skills necessary to establish new rural microenterprises; and
(B) continuing technical and financial assistance related to the successful operation of rural microenterprises.
(3) Loans
(A) In general

The Secretary shall make loans to microenterprise development organizations for the purpose of providing fixed interest rate microloans to microentrepreneurs for startup and growing rural microenterprises.

(B) Loan termsA loan made by the Secretary to a microenterprise development organization under this paragraph shall—
(i) be for a term not to exceed 20 years; and
(ii) bear an annual interest rate of at least 1 percent.
(C) Loan loss reserve fundThe Secretary shall require each microenterprise development organization that receives a loan under this paragraph to—
(i) establish a loan loss reserve fund; and
(ii) maintain the reserve fund in an amount equal to at least 5 percent of the outstanding balance of such loans owed by the microenterprise development organization, until all obligations owed to the Secretary under this paragraph are repaid.
(D) Deferral of interest and principal

The Secretary may permit the deferral of payments on principal and interest due on a loan to a microenterprise development organization made under this paragraph for a 2-year period beginning on the date the loan is made.

(4) Grants
(A) Grants to support rural microenterprise development
(i) In generalThe Secretary shall make grants to microenterprise development organizations to—(I) provide training, operational support, business planning, and market development assistance, and other related services to rural microentrepreneurs; and(II) carry out such other projects and activities as the Secretary determines appropriate to further the purposes of the program.
(ii) SelectionIn making grants under clause (i), the Secretary shall—(I) place an emphasis on microenterprise development organizations that serve microentrepreneurs that are located in rural areas that have suffered significant outward migration, as determined by the Secretary; and(II) ensure, to the maximum extent practicable, that grant recipients include microenterprise development organizations—(aa) of varying sizes; and(bb) that serve racially and ethnically diverse populations.
(B) Grants to assist microentrepreneurs
(i) In generalThe Secretary shall make grants to microenterprise development organizations to provide marketing, management, and other technical assistance to microentrepreneurs that—(I) received a loan from the microenterprise development organization under paragraph (3); or(II) are seeking a loan from the microenterprise development organization under paragraph (3).
(ii) Amount of grantA microenterprise development organization shall be eligible to receive an annual grant under this subparagraph in an amount equal to not less than 20 percent and not more than 25 percent of the total outstanding balance of microloans made by the microenterprise development organization under paragraph (3), as of the date the grant is awarded, subject to—(I) satisfactory performance by the microenterprise development organization under this section, and(II) the availability of funding.
(C) Administrative expenses

Not more than 10 percent of a grant received by a microenterprise development organization for a fiscal year under this paragraph may be used to pay administrative expenses.

(c) Administration
(1) Cost share
(A) Federal share

Subject to subparagraph (B), the Federal share of the cost of a project funded under this section shall not exceed 75 percent.

(B) Matching requirement

As a condition of any grant made under this subparagraph, the Secretary shall require the microenterprise development organization to match not less than 15 percent of the total amount of the grant in the form of matching funds, indirect costs, or in-kind goods or services.

(C) Form of non-Federal shareThe non-Federal share of the cost of a project funded under this section may be provided—
(i) in cash (including through fees, grants (including community development block grants), and gifts); or
(ii) in the form of in-kind contributions.
(2) Oversight

At a minimum, not later than December 1 of each fiscal year, a microenterprise development organization that receives a loan or grant under this section shall provide to the Secretary such information as the Secretary may require to ensure that assistance provided under this section is used for the purposes for which the loan or grant was made.

(d) Authorization of appropriations

There are authorized to be appropriated to carry out this section $20,000,000 for each of fiscal years 2019 through 2023.

(Pub. L. 87–128, title III, § 379E, as added Pub. L. 110–234, title VI, § 6022, May 22, 2008, 122 Stat. 1173, and Pub. L. 110–246, § 4(a), title VI, § 6022, June 18, 2008, 122 Stat. 1664, 1934; amended Pub. L. 113–79, title VI, § 6023, Feb. 7, 2014, 128 Stat. 848; Pub. L. 115–334, title VI, § 6422, Dec. 20, 2018, 132 Stat. 4765.)

CITE AS: 7 USC 2008s

§ 2008t. Repealed. Pub. L. 115–334, title VI, § 6601(a)(1)(G), Dec. 20, 2018, 132 Stat. 4776

CITE AS: 7 USC 2008t

§ 2008u. Health care services
(a) Purpose

The purpose of this section is to address the continued unmet health needs in the Delta region through cooperation among health care professionals, institutions of higher education, research institutions, and other individuals and entities in the region.

(b) Definition of eligible entity

In this section, the term “eligible entity” means a consortium of regional institutions of higher education, academic health and research institutes, and economic development entities located in the Delta region that have experience in addressing the health care issues in the region.

(c) GrantsTo carry out the purpose described in subsection (a), the Secretary may award a grant to an eligible entity for—
(1) the development of—
(A) health care services;
(B) health education programs; and
(C) health care job training programs; and
(2) the development and expansion of public health-related facilities in the Delta region to address longstanding and unmet health needs of the region.
(d) Use

As a condition of the receipt of the grant, the eligible entity shall use the grant to fund projects and activities described in subsection (c), based on input solicited from local governments, public health care providers, and other entities in the Delta region.

(e) Authorization of appropriations

There is authorized to be appropriated to the Secretary to carry out this section, $3,000,000 for each of fiscal years 2008 through 2023.

(Pub. L. 87–128, title III, § 379G, as added Pub. L. 110–234, title VI, § 6024, May 22, 2008, 122 Stat. 1176, and Pub. L. 110–246, § 4(a), title VI, § 6024, June 18, 2008, 122 Stat. 1664, 1938; amended Pub. L. 113–79, title VI, § 6024, Feb. 7, 2014, 128 Stat. 848; Pub. L. 115–334, title VI, § 6423, Dec. 20, 2018, 132 Stat. 4765.)

CITE AS: 7 USC 2008u

§ 2008v. Strategic economic and community development
(a) In generalIn the case of any program under this chapter or administered by the Secretary, acting through the rural development mission area, as determined by the Secretary (referred to in this section as a “covered program”), the Secretary shall give priority to an application for a project that, as determined and approved by the Secretary—
(1) meets the applicable eligibility requirements of this chapter or the other applicable authorizing law;
(2) will be carried out in a rural area; and
(3) supports the implementation of a strategic community investment plan described in subsection (d) on a multisectoral and multijurisdictional basis, to include considerations for improving and expanding broadband services as needed.
(b) Reserve
(1) In general

Subject to paragraph (2), the Secretary shall reserve not more than 15 percent of the funds made available for a fiscal year for covered programs for projects that support the implementation of a strategic community investment plan described in subsection (d) on a multisectoral and multijurisdictional basis.

(2) Period

Any funds reserved under paragraph (1) shall only be reserved for the 1-year period beginning on the date on which the funds were first made available, as determined by the Secretary.

(c) Approved applications
(1) In general

Subject to paragraph (2), any applicant who submitted an application under a covered program that was approved before the date of enactment of this section 1

1 See References in Text note below.
may amend the application to qualify for the funds reserved under subsection (b).

(2) Rural utilitiesAny applicant who submitted an application under paragraph (2), (14), or (24) of section 1926(a) of this title, or section 1926a or 1932(b) of this title, that was approved by the Secretary before the date of enactment of this section 1 shall be eligible for the funds reserved under subsection (b)—
(A) on the same basis as an application submitted under this section; and
(B) until September 30, 2019.
(d) Strategic community investment plans
(1) In general

The Secretary shall provide assistance to rural communities in developing strategic community investment plans.

(2) PlansA strategic community investment plan described in paragraph (1) shall include—
(A) a variety of activities designed to facilitate the vision of a rural community for the future, including considerations for improving and expanding broadband services as needed;
(B) participation by multiple stakeholders, including local and regional partners;
(C) leverage of applicable regional resources;
(D) investment from strategic partners, such as—
(i) private organizations;
(ii) cooperatives;
(iii) other government entities;
(iv) Indian Tribes; and
(v) philanthropic organizations;
(E) clear objectives with the ability to establish measurable performance metrics;
(F) action steps for implementation; and
(G) any other elements necessary to ensure that the plan results in a comprehensive and strategic approach to rural economic development, as determined by the Secretary.
(3) Coordination

The Secretary shall coordinate with Indian Tribes and local, State, regional, and Federal partners to develop strategic community investment plans under this subsection.

(4) Authorization of appropriations

There is authorized to be appropriated to carry out this subsection $5,000,000 for each of fiscal years 2019 through 2023, to remain available until expended.

(Pub. L. 87–128, title III, § 379H, as added Pub. L. 113–79, title VI, § 6025, Feb. 7, 2014, 128 Stat. 848; amended Pub. L. 115–334, title VI, § 6401, Dec. 20, 2018, 132 Stat. 4756.)

CITE AS: 7 USC 2008v

§ 2008w. Rural Innovation Stronger Economy Grant Program
(a) DefinitionsIn this section:
(1) Eligible entityThe term “eligible entity” means a rural jobs accelerator partnership established after December 20, 2018, that—
(A) organizes key community and regional stakeholders into a working group that—
(i) focuses on the shared goals and needs of the industry clusters that are objectively identified as existing, emerging, or declining;
(ii) represents a region defined by the partnership in accordance with subparagraph (B);
(iii) includes 1 or more representatives of—(I) an institution of higher education (as defined in section 1001 of title 20);(II) a private entity; or(III) a government entity; and
(iv) has, as a lead applicant—(I) a District Organization (as defined in section 300.3 of title 13, Code of Federal Regulations (or a successor regulation));(II) an Indian tribe (as defined in section 5304 of title 25), or a consortium of Indian tribes;(III) a State or a political subdivision of a State, including a special purpose unit of a State or local government engaged in economic development activities, or a consortium of political subdivisions;(IV) an institution of higher education (as defined in section 1001 of title 20) or a consortium of institutions of higher education; or(V) a public or private nonprofit organization; and
(B) subject to approval by the Secretary, may—
(i) serve a region that is—(I) a single jurisdiction; or(II) if the region is a rural area, multijurisdictional; and
(ii) define the region that the partnership represents, if the region—(I) is large enough to contain critical elements of the industry cluster prioritized by the partnership;(II) is small enough to enable close collaboration among members of the partnership;(III) includes a majority of communities that are located in—(aa) a nonmetropolitan area that qualifies as a low-income community (as defined in section 45D(e) of title 26); and(bb) an area that has access to or has a plan to achieve broadband service (within the meaning of title VI of the Rural Electrification Act of 1936 (7 U.S.C. 950bb et seq.)); and(IV)(aa) has a population of 50,000 or fewer inhabitants; or(bb) for a region with a population of more than 50,000 inhabitants, is the subject of a positive determination by the Secretary with respect to a rural-in-character petition, including such a petition submitted concurrently with the application of the partnership for a grant under this section.
(2) Industry cluster

The term “industry cluster” means a broadly defined network of interconnected firms and supporting institutions in related industries that accelerate innovation, business formation, and job creation by taking advantage of assets and strengths of a region in the business environment.

(3) High-wage job

The term “high-wage job” means a job that provides a wage that is greater than the median wage for the applicable region, as determined by the Secretary.

(4) Jobs accelerator

The term “jobs accelerator” means a jobs accelerator center or program located in or serving a low-income rural community that may provide co-working space, in-demand skills training, entrepreneurship support, and any other services described in subsection (d)(1)(B).

(5) Small and disadvantaged business

The term “small and disadvantaged business” has the meaning given the term “small business concern owned and controlled by socially and economically disadvantaged individuals” in section 637(d)(3)(C) of title 15.

(b) Establishment
(1) In generalThe Secretary shall establish a grant program under which the Secretary shall award grants, on a competitive basis, to eligible entities to establish jobs accelerators, including related programming, that—
(A) improve the ability of distressed rural communities to create high-wage jobs, accelerate the formation of new businesses with high-growth potential, and strengthen regional economies, including by helping to build capacity in the applicable region to achieve those goals; and
(B) help rural communities identify and maximize local assets and connect to regional opportunities, networks, and industry clusters that demonstrate high growth potential.
(2) Cost-sharing
(A) In general

The Federal share of the cost of any activity carried out using a grant made under paragraph (1) shall be not greater than 80 percent.

(B) In-kind contributions

The non-Federal share of the total cost of any activity carried out using a grant made under paragraph (1) may be in the form of donations or in-kind contributions of goods or services fairly valued.

(3) Selection criteriaIn selecting eligible entities to receive grants under paragraph (1), the Secretary shall consider—
(A) the commitment of participating core stakeholders in the jobs accelerator partnership, including a demonstration that—
(i) investment organizations, including venture development organizations, venture capital firms, revolving loan funders, angel investment groups, community lenders, community development financial institutions, rural business investment companies, small business investment companies (as defined in section 662 of title 15), philanthropic organizations, and other institutions focused on expanding access to capital, are committed partners in the jobs accelerator partnership and willing to potentially invest in projects emerging from the jobs accelerator; and
(ii) institutions of higher education, applied research institutions, workforce development entities, and community-based organizations are willing to partner with the jobs accelerator to provide workers with skills relevant to the industry cluster needs of the region, with an emphasis on the use of on-the-job training, registered apprenticeships, customized training, classroom occupational training, or incumbent worker training;
(B) the ability of the eligible entity to provide the non-Federal share as required under paragraph (2);
(C) the identification of a targeted industry cluster;
(D) the ability of the partnership to link rural communities to markets, networks, industry clusters, and other regional opportunities and assets;
(E) other grants or loans of the Secretary and other Federal agencies that the jobs accelerator would be able to leverage; and
(F) prospects for the proposed center and related programming to have sustainability beyond the full maximum length of assistance under this subsection, including the maximum number of renewals.
(4) Grant term and renewals
(A) Term

The initial term of a grant under paragraph (1) shall be 4 years.

(B) Renewal

The Secretary may extend the term of a grant under paragraph (1) for an additional period of not longer than 2 years if the Secretary is satisfied, using the evaluation under subsection (e)(2), that the grant recipient has successfully established a jobs accelerator and related programming.

(5) Geographic distribution

To the maximum extent practicable, the Secretary shall provide grants under paragraph (1) for jobs accelerators and related programming in not fewer than 25 States at any time.

(c) Grant amountA grant awarded under subsection (b) may be in an amount equal to—
(1) not less than $500,000; and
(2) not more than $2,000,000.
(d) Use of funds
(1) In generalSubject to paragraph (2), funds from a grant awarded under subsection (b) may be used—
(A) to construct, purchase, or equip a building to serve as an innovation center;
(B) to support programs to be carried out at, or in direct partnership with, the jobs accelerator that support the objectives of the jobs accelerator, including—
(i) linking rural communities and entrepreneurs to markets, networks, industry clusters, and other regional opportunities to support high-wage job creation, new business formation, business expansion, and economic growth;
(ii) integrating small businesses into a supply chain;
(iii) creating or expanding commercialization activities for new business formation;
(iv) identifying and building assets in rural communities that are crucial to supporting regional economies;
(v) facilitating the repatriation of high-wage jobs to the United States;
(vi) supporting the deployment of innovative processes, technologies, and products;
(vii) enhancing the capacity of small businesses in regional industry clusters, including small and disadvantaged businesses;
(viii) increasing United States exports and business interaction with international buyers and suppliers;
(ix) developing the skills and expertise of local workforces, entrepreneurs, and institutional partners to meet the needs of employers and prepare workers for high-wage jobs in the identified industry clusters, including the upskilling of incumbent workers;
(x) ensuring rural communities have the capacity and ability to carry out projects relating to housing, community facilities, infrastructure, or community and economic development to support regional industry cluster growth; or
(xi) any other activities that the Secretary may determine to be appropriate.
(2) Requirement
(A) In general

Subject to subparagraph (B), not more than 10 percent of a grant awarded under subsection (b) shall be used for indirect costs associated with administering the grant.

(B) Increase

The Secretary may increase the percentage described in subparagraph (A) on a case-by-case basis.

(e) Annual activity report and evaluationNot later than 1 year after receiving a grant under this section, and annually thereafter for the duration of the grant, an eligible entity shall—
(1) report to the Secretary on the activities funded with the grant; and
(2)
(A) evaluate the progress that the eligible entity has made toward the strategic objectives identified in the application for the grant; and
(B) measure that progress using performance measures during the project period, which may include—
(i) high-wage jobs created;
(ii) high-wage jobs retained;
(iii) private investment leveraged;
(iv) businesses improved;
(v) new business formations;
(vi) new products or services commercialized;
(vii) improvement of the value of existing products or services under development;
(viii) regional collaboration, as measured by such metrics as—(I) the number of organizations actively engaged in the industry cluster;(II) the number of symposia held by the industry cluster, including organizations that are not located in the immediate region defined by the partnership; and(III) the number of further cooperative agreements;
(ix) the number of education and training activities relating to innovation;
(x) the number of jobs relocated from outside of the United States to the region;
(xi) the amount and number of new equity investments in industry cluster firms;
(xii) the amount and number of new loans to industry cluster firms;
(xiii) the dollar increase in exports resulting from the project activities;
(xiv) the percentage of employees for which training was provided;
(xv) improvement in sales of participating businesses;
(xvi) improvement in wages paid at participating businesses;
(xvii) improvement in income of participating workers; or
(xviii) any other measure the Secretary determines to be appropriate.
(f) Authorization of appropriations

There is authorized to be appropriated to carry out this section $10,000,000 for each of fiscal years 2019 through 2023.

(Pub. L. 87–128, title III, § 379I, as added Pub. L. 115–334, title VI, § 6424, Dec. 20, 2018, 132 Stat. 4765.)

CITE AS: 7 USC 2008w

§ 2008x. Reporting
(a) Definition of farm loanIn this section, the term “farm loan” means—
(1) a farm ownership loan under subtitle A of the Consolidated Farm and Rural Development Act (7 U.S.C. 1922 et seq.); and
(2) an operating loan under subtitle B of that Act (7 U.S.C. 1941 et seq.).
(b) Reports
(1) PreparationFor each fiscal year, the Secretary shall prepare a report that includes—
(A) aggregate data based on a review of each outstanding farm loan made or guaranteed by the Secretary describing, for the United States and for each State and county in the United States—
(i) the age of the recipient producer;
(ii) the duration that the recipient producer has engaged in agricultural production;
(iii) the size of the farm or ranch of the recipient producer;
(iv) the race, ethnicity, and gender of the recipient producer;
(v) the agricultural commodity or commodities, or type of enterprise, for which the loan was secured;
(vi) the amount of the farm loan made or guaranteed;
(vii) the type of the farm loan made or guaranteed; and
(viii) the default rate of the farm loan made or guaranteed;
(B) for each State and county in the United States, data demonstrating the number of outstanding farm loans made or guaranteed, according to loan size cohort; and
(C) an assessment of actual loans made or guaranteed as measured against target participation rates for beginning and socially disadvantaged farmers, broken down by State, as described in sections 346(b)(2) and 355 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1994(b)(2), 2003).
(2) Submission of reportThe report described in paragraph (1) shall be—
(A) submitted—
(i) to—(I) the Committee on Agriculture of the House of Representatives;(II) the Committee on Appropriations of the House of Representatives;(III) the Committee on Agriculture, Nutrition, and Forestry of the Senate; and(IV) the Committee on Appropriations of the Senate; and
(ii) not later than December 30, 2019, and annually thereafter; and
(B) made publicly available not later than 90 days after the date described in subparagraph (A)(ii).
(c) Comprehensive review
(1) In generalNot later than 4 years after December 20, 2018 (and every 5 years thereafter), the Secretary shall—
(A) prepare a comprehensive review of all reports submitted under subsection (b)(2);
(B) identify trends within data outlined in subsection (b)(1), including the extent to which target annual participation rates for beginning and socially disadvantaged farmers (as defined by the Secretary) are being met for each loan type; and
(C) provide specific actions the Department will take to improve the performance of direct and guaranteed loans with respect to underserved producers and any recommendations the Secretary may make for further congressional action.
(2) Submission of comprehensive reviewThe comprehensive review described in paragraph (1) shall be—
(A) submitted to—
(i) the Committee on Agriculture of the House of Representatives;
(ii) the Committee on Appropriations of the House of Representatives;
(iii) the Committee on Agriculture, Nutrition, and Forestry of the Senate; and
(iv) the Committee on Appropriations of the Senate; and
(B) made publicly available not later than 90 days after the date of submission under subparagraph (A).
(d) Privacy

In preparing any report or review under this section, the Secretary shall aggregate or de-identify the data in a manner sufficient to ensure that the identity of a recipient producer associated with the data cannot be ascertained.

(Pub. L. 115–334, title V, § 5413, Dec. 20, 2018, 132 Stat. 4722.)

CITE AS: 7 USC 2008x