« AnteriorContinuar »
not apply with respect to the cancellation of any part 8 2000. Homestead protection of any loan that was made after December 25, 1985."
(a) Definitions 8 1999. Interest rate reduction program
As used in this section: [See main edition for text of (a) and (6)]
[See main edition for text of (1)] (c) Payments to lenders
(2) The term “borrower-owner" meansIn return for a contract entered into by a
(A) a borrower of a loan made or insured lender under subsection (b) of this section for the reduction of the interest rate paid on a
by the Secretary or the Administrator who loan, the Secretary shall make payments to the
meets the eligibility requirements of subsec
tion (c)(1) of this section; or lender in an amount equal to not more than 100
(B) in any case in which an owner of percent of the cost of reducing the annual rate
homestead property pledged the property of interest payable on such loan, except that
to secure the loan and the owner is differ such payments may not exceed the cost of re
ent than the borrower, the owner. ducing such rate by more than 4 percent.
(3) The term "farm program loan” means (d) Duration of contracts
any loan made by the Administrator under The term of a contract entered into under the Small Business Act (15 U.S.C. 631 et seq.) this section to reduce the interest rate on a for any of the purposes authorized for loans guaranteed loan may not exceed the outstand- under subchapters ' I or II of this chapter. ing term of such loan.
(4) The term "homestead property" means
the principal residence and adjoining proper: (See main edition for text of (e) to (9)]
ty possessed and occupied by a borrower (h) Demonstration project for purchase of System
owner specified in paragraph (2) of this subland
section, including a reasonable number of
farm outbuildings located on the adjoining (1) During the 4-year period beginning on
land that are useful to the occupants of the January 6, 1988, the Secretary shall establish
homestead, and no more than 10 acres of adand carry out a demonstration project in ac
joining land that is used to maintain the cordance with this subsection under which the
family of the individual. Secretary may issue certificates of eligibility to
(5) The term “Secretary" means the Secre Farmers Home Administration eligible borrow
tary of Agriculture. ers to reduce the interest rate paid by the borrowers on loans obtained from legally organized (b) Occupancy of homestead upon foreclosure
, lending institutions and Farm Credit System in- bankruptcy, or liquidation; appraisal; period of stitutions to purchase acquired properties occupancy owned by institutions of the Farm Credit
(1) The Secretary or the Administrator shall
, System certified to issue preferred stock under
on application by a borrower-owner who meets section 2278b-7 of title 12.
the eligibility requirements of subsection (cXl)
of this section, permit the borrower-owner to [See main edition for text of (2) to (9)]
retain possession and occupancy of homestead (As amended Pub. L. 101-508, title
I, property under the terms set forth, and until $ 1202(b)(1), (c), Nov. 5, 1990, 104 Stat. 1388-10, the action described in this section has been 1388-11.)
[See main edition for text of (A) and (B)] 1990–Subsec. (c). Pub. L. 101-508, $ 1202(b)(1)(A), substituted “100 percent" for “50 percent" and "4 per
(C) the borrower-owner of a loan made of cent" for "2 percent".
insured by the Secretary or the AdministraSubsec. (d). Pub. L. 101-508, § 1202(b)(1)(B), struck
petition in bankruptcy that results out“, or 3 years, whichever is less" after "term of in the conveyance of the homestead property such loan".
to the Secretary or the Administrator, or Subsec. (h)(1). Pub. L. 101-508, $ 1202(c), substituted
agrees to voluntarily liquidate or convey such "4-year” for “3-year".
property in whole or in part, EFFECTIVE DATE OF 1990 AMENDMENT
(2) The value of the homestead property Amendment by Pub. L. 101-508 effective Nov. 29,
shall be determined insofar as possible by an in1990, see section 1301 of Pub. L. 101-508, set out as a dependent appraisal made within six months note under section 511r of this title.
from the date of the borrower-owner's applica
tion to retain possession and occupancy of the EFFECTIVE AND TERMINATION DATES
homestead property. Section 1320 of Pub. L. 99-198, as amended by Pub. (3) The period of occupancy of homestead L. 100-233, title VI. 8 613(a), Jan. 6, 1988, 101 Stat. property under this subsection may not exceed 1674; Pub. L. 101-508, title I, § 1202(b)(2), Nov, 5, 1990,
five years, but in no case shall the Secretary or 104 Stat. 1388-11, provided in part that this section is
the Administrator grant a period of occupancy effective only for the period beginning Dec. 23, 1985,
less than three years, subject to compliance and ending Sept. 30, 1995.
with the requirements of subsection (c) of this SECTION REFERRED TO IN OTHER SECTIONS
section. This section is referred to in sections 1948, 1983a, 1991, 1994 of this title.
So in original. Probably should be "subchapter".
the borrower-owner and the Secretary for occupancy of the homestead property, shall be transferable or assignable by the borrowerowner 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) Within 30 days of the acquisition of the homestead property securing a loan made or insured under this chapter, the Secretary shall notify the borrower-owner from whom the property was acquired of the availability of homestead protection rights under this section. For property in inventory on January 6, 1988, the Secretary shall make a good faith effort to notify the borrower-owner of the availability of homestead protection rights under this section within 60 days after January 6, 1988. (d) First right of refusal of reacquisition
At the end of the period of occupancy described in subsection (c) of this section, 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.
[See main edition for text of (e) and (1)
(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 90 days after the property is acquired by the Secretary or Administrator, or for property in inventory on January 6, 1988, the borrowerowner shall apply for occupancy not later than 90 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
[See main edition for text of (ii)] (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 borrowerowner 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;
[See main edition for text of (E) to (G)] (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 borrowerowner, 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 borrowerowner 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 of this title and shall comply with all applicable State and local laws governing eviction from residential property.
(4) [See main edition for text of (A)]
(B) At any time during the period of occupancy, 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 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
(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. (As amended 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.)
REFERENCES IN TEXT The Small Business Act, referred to in subsecs. (a)(3) and (b)(1)(B), is Pub. L. 85-536, July 18, 1958, 72 Stat. 384, as amended, which is classified generally to chapter 14A (8 631 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under section 631 of Title 15 and Tables.
AMENDMENTS 1992- Subsec. (a)(4), (5). Pub. L. 102-552, $ 516(i), redesignated par. (4), defining “Secretary", as (5).
Subsec. (b)(2). Pub. L. 102-552, $ 516(1)(1), substituted "borrower-owner's” for “borrower's”.
1991–Subsec. (a)(2) to (4). Pub. L. 102-237, $ 501(g), added par. (2), redesignated former pars. (2) and (3) as (3) and (4), respectively, and substituted "borrowerowner" for "borrower" in redesignated par. (4).
Subsec. (b)(1). Pub. L. 102-237, $ 501(g)(2), substituted "borrower-owner" for "borrower" wherever appearing.
Subsec. (b)(3). Pub. L. 102-237, 8701(h)(2), struck out "be" after “shall”.
Subsecs. (c), (d), (g). Pub. L. 102-237, $ 501(g)(2), substituted "borrower-owner" for "borrower" wherever appearing.
paragraph (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
EFFECTIVE DATE OF 1992 AMENDMENT Section 516(1)(2) of Pub. L. 102-552 provided that: "The amendment made by paragraph (1) of this subsection (amending this section) shall take effect at the same time as the amendments made by section 501(f) of the Food, Agriculture, Conservation, and Trade Act Amendments of 1991 (Public Law 102-237; 105 Stat. 1867) (amending section 1985 of this title) took effect."
EFFECTIVE DATE OF 1991 AMENDMENT Amendment by section 701(h)(2) of Pub. L. 102-237 to any provision specified therein effective as if includ. ed in act that added provision so specified at the time such act became law, see section 1101(c) of Pub. L. 102-237, set out as a note under section 1421 of this title.
[See main edition for text of (A) and (B)]
For the purpose of assessing under sub-
If an amount up to 105 percent of the debt payments of the borrower has been earmarked for such payments, the Secretary shall consider the income of the bor. rower to be adequate to meet the debt ob
ligations of the borrower. (4) Notification
Within 90 days after receipt of a written request for restructuring from the borrower, the Secretary shall
8 2001. Debt restructuring and loan servicing
[See main edition for text of (a)] (b) Eligibility
To be eligible to obtain assistance under subsection (a) of this section
(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) of this section 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) of this section;
[See main edition for text of (2) to (4)] (c) Restructuring determinations
[See main edition for text of (1)] (2) Recovery value
For 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[See main edition for text of (i) to (iii)]
(iv) other administrative and attorney's costs; plus
(C) the value, as determined by the Secretary, of any property not included in sub
(See main edition for text of (A) to (C), (5)]
Except as provided in subparagraph (B), the obligations of
borrower to the Secretary under a restructured loan shall terminate if
(I) the borrower satisfies the requirements of paragraphs (1) and (2) of subsection (b) of this section;
(II) the value of the restructured loan is less than the recovery value; and
(III) within 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 recovery
value. (ii) Limited applicability of good faith require
ment Clause (i)(I) shall not apply to any offer of net recovery buyout made by the Secretary under this section before November 28, 1990, unless the Secretary, before such date, determined that the borrower involved did not act in good faith with re
spect to the loan. (B) Recapture (i) Authority to require borrower to enter into
agreement before terminating loan obliga
The Secretary may require, as a condition of the termination of loan obliga
Xi) if the property is sports
tion for text of (A) and 1
rpose of assessing under se
bligations and continue is
unt up to 105 percent of 2 its of the borrower heater or such payments
, the Sea msider the income of te dequate to meet the des ne borrower.
(1) disposed of normal income security prie to October 14, 1988, without the consent the Secretary; and (2) demonstrates that,
(A) the proceeds were utilized to pay e sential household and farm operating e penses; and
(B) the borrower would have been ent tled to a release of income proceeds by th Secretary if the regulations in effect on No vember 28, 1990, had been in effect at th
time of the disposition, the Secretary shall not consider the borrowe to have acted without good faith to the exten of the disposition. (n) Only 1 write-down or net recovery buy-out pe
borrower for loan made after January 6, 1988 (1) In general
The Secretary may provide for any one bor rower not more than 1 write-down or net re covery buy-out under this section with re spect to all loans made to the borrower afte January 6, 1988. (2) Special rule
For purposes of paragraph (1), the Secre tary shall treat any loan made on or befor January 6, 1988, with respect to which a re structuring, write-down, or net recovery buy out is provided under this section after such
date, as a loan made after such date. (0) Liquidation of assets
The Secretary may not use the authority pro vided 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 subsec tion (c)(2)(A)(ii) of this section.
after receipt of a writer cturing from the bormour -11
n for lert of (A) to (0
tions under this paragraph, that the
The agreement described in subclause (I) shall not provide for recapture of an amount that exceeds the difference between such recovery value and the outstanding balance of principal and interest owed on the loan immediately prior to the termination of any loan obliga
tions under this paragraph.
For purposes of clause (i)(I), transfer of title to a property, on the death or retirement of the borrower, to a spouse or child of the borrower who is actively engaged in farming on the property shall not be
treated as a sale or conveyance. (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.
(See main edition for text of (d) to (k)] (1) 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. (m) Disposition of normal income security
For purposes of subsection (b)(2) of this section, and subparagraphs (A)(i) and (C)(i) of section 1985(eXl) of this title, if a borrower
oan obligations litions
ovided in subparagraph i 5 of a borrower to the State restructured loan shal 17
(p) Lifetime limitation on debt forgiveness per bor
Tower satisfies the more agraphs (1) and (2) del seu
this section; ue of the restructured in de recovery value; and 7 90 days after recent on described in parents borrower pays (or other nancing to pay) the German unt equal to the recente
The Secretary may provide not more than $300,000 in principal and interest forgiveness under this section per borrower. (As 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.)
cability of good faith reptein
REFERENCES IN TEXT For definition of “this chapter", referred to in subsecs. (a), (c)(5), and (1), see note set out under section 1921 of this title.
hall not apply to an alt
buyout made by the
AMENDMENTS 1991–Subsec. (c)(6)(A)(ii). Pub, L. 102-237, $ 501(h)(1), substituted "November 28, 1990” for “the date of enactment of this paragraph".
Subsec. (m). Pub. L. 102-237, $ 501(h)(2), substituted "section 1985(e)(1)” for “section 1985(e)(1)(A)".
1990-Subsec. (b)(1). Pub. L. 101-624, $ 1816(a), inserted before semicolon at end ", except that the regu. lations shall require that, if the value of the assets calculated under subsection (c)(2)(AXii) of this section that may be realized through liquidation or other methods would produce enough income to make the delinquent loan current, the borrower shall not be eli.
quire borrower to enter i ore terminating loan shin
y may require, as a mination of loan oling
gible for assistance under subsection (a) of this sec- "(c) DEBT RESTRUCTURING AND LOAN SERVICING.–
"(1) IN GENERAL.-Except as provided in section Subsec. (c)(2)(A). Pub. L. 101-624, § 1816(b)(1), 353(c)(6)(A)(ii) of the Consolidated Farm and Rural amended subpar. (A) generally. Prior to amendment, Development Act 17 U.S.C. 2001(c)(6)(AXiii)] (as subpar. (A) read as follows: "the amount of the cur- added by section 1816(f) of this Act) and in pararent appraised value of the property securing the loan; graph (3) of this subsection, section 1816 of this Act less".
and the amendments made by such section 1816 Subsec. (c)(2)(B)(iv). Pub. L. 101-624, (amending this section and section 1985 of this title] § 1816(b)(2)(A), substituted "costs; plus” for “costs." shall apply to new applications submitted under sec
Subsec. (c)(2)(C). Pub. L. 101-624, § 1816(b)(2)(B), tion 353 of the Consolidated Farm and Rural Devel: added subpar. (C).
opment Act (7 U.S.C. 2001) on or after the date of Subsec. (c)(3)(C). Pub. L. 101-624, $ 1816(c), added enactment of this Act (Nov. 28, 1990). subpar. (C).
"(2) DEFINITION OF NEW APPLICATION.-As used in Subsec. (c)(4), Pub. L. 101-624, $ 1816(d), substituted paragraph (1), the term 'new application' means an "90" for "60" in introductory provisions.
application submitted by a borrower to initiate a Subsec. (c)(6). Pub. L. 101-624, $ 1816(f), amended debt restructuring consideration and not an applicapar. (6) generally. Prior to amendment, par. (6) read as tion reconsidered after an appeal or revision of the follows: "If the value of the restructured loan is less original application. than the recovery value and if, within 45 days after re- “(3) LIQUIDATION OF ASSETS.-Section 353(0) of the ceipt of the notification described in paragraph (4)(B), Consolidated Farm and Rural Development Act 17 the boi rower pays (or obtains third-party financing to U.S.C. 2001(0)) (as added by section 18160h) of this pay) the Secretary an amount equal to the recovery Act) shall not apply until the Secretary of Agricul. value, the obligations of the borrower to the Secretary ture has issued final regulations to carry out such under the loan shall terminate, except that the Secre- section 353(0). tary may require, as a condition of such termination “(d) RESTORATION OF FIRST LIEN ON STOCK. - The of loan obligations, that the borrower enter into an amendment made by section 1833 of this Act (enacting agreement with the Secretary if the borrower sells or section 2076a of Title 12 and amending section 2077 of otherwise conveys the real property used to secure Title 12) shall be effective as of January 7, 1988. such loan within 2 years after the date of such agree- "(e) REGULATIONS.-As soon as practicable after the ment. Any such agreement shall provide for the recap- date of enactment of this Act (Nov, 28, 1990) ture of part or all of the difference between the recov- •"(1) the Secretary of Agriculture shall issue such ery value of the loan and the fair market value (on the regulations as are necessary to carry out subtitles A date of such agreement) of the property securing the and C of this Act (probably means subtitles A loan if the borrower realizes a gain on the sale or con- ($ $ 1801-1824) and C ($$ 1851-1854) of title XVIII of veyance over the amount of the recovery value of the Pub. L. 101-624, enacting sections 1981f and 2006a to loan. In no event shall any such agreement provide for 2006e of this title and section 494 of Title 25, amendrecapture of an amount that exceeds the difference ing this section, sections 1924, 1927, 1933, 1934, 1942, between such recovery value and the fair market value 1946, 1981, 1981d, 1982, 1983, 1983a, 1983b, 1985, of the property securing the loan on the date of such 1991, 1997, 2003, and 5106 of this title and section agreement."
492 of Title 25, enacting provisions set out as a note Subsec. (c)(7). Pub. L. 101-624, § 1816(g), added par. under section 1981f of this title, amending provisions (7),
set out as a note under section 1985 of this title, and Subsecs. (l) to (p). Pub. L. 101-624, § 1816(h), added repealing provisions set out as a note preceding secsubsecs. (1) to (p).
tion 1961 of this title) and the amendments made by
such subtitles; and EFFECTIVE DATE OF 1991 AMENDMENT
"(2) the Farm Credit Administration shall issue Amendment by Pub. L. 102-237 effective as if includ- such regulations as are necessary to carry out subed in the provision of the Food, Agriculture, Conserva- title B of this Act (probably means subtitle B tion, and Trade Act of 1990, Pub. L. 101-624, to which ($ $ 1831-1843) of title XVIII of Pub. L. 101-624, en: the amendment relates, see section 1101(b)(3) of Pub. acting section 2076a of Title 12, amending section L. 102-237, set out as a note under section 1421 of this 3132 of Title 5 and sections 2019, 2075, 2077, 2218, title.
2252, 2254, 2277a-5, 2277a-9, 22778-10, 2277a-14
2278a-6, 2279aa, and 2279aa-11 of Title 12, and enEFFECTIVE DATE OF 1990 AMENDMENT
acting provisions set out as a note under section 2001
of Title 12) and the amendments made by such subSection 1861 of title XVIII of Pub. L. 101-624 provid
title." ed that:
"(a) IN GENERAL.-Except as otherwise provided in this title, this title and the amendments made by this
SECTION REFERRED TO IN OTHER SECTIONS title (enacting sections 1981f and 2006а to 2006e of
This section is referred to in sections 1985, 1991, this title, section 2076a of Title 12, Banks and Bank
2001a, 2005 of this title. ing, and section 494 of Title 25, Indians, amending this section, sections 1924, 1927, 1933, 1934, 1942, 1946,
8 2001a. Debt restructuring and loan servicing for 1981, 1981d, 1982, 1983, 1983a, 1983b, 1985, 1991, 1997,
community facility loans 2003, and 5106 of this title, section 3132 of Title 5, Government Organization and Employees, sections The Secretary shall establish and implement 2019, 2075, 2077, 2218, 2252, 2254, 22772-5, 22774-9,
a program that is similar to the program estab22772-10, 22778-14, 2278a-6, 2279aa, and 2279aa-11 of
lished under section 2001 of this title, except Title 12, and section 492 of Title 25, enacting provi.
that the debt restructuring and loan servicing sions set out as notes under section 1981f of this title and section 2001 of Title 12, amending provisions set
procedures shall apply to delinquent communiout as a note under section 1985 of this title, and re- ty facility program loans (rather than delinpealing provisions set out as a note preceding section quent farmer program loans) made by the 1961 of this title) shall become effective on the date of Farmers Home Administration to a hospital or enactment of this Act (Nov. 28, 1990).
health care facility under section 1926(a) of "(b) NOTICE OF DEBT SETTLEMENT PROGRAMS.-The
this title, amendment made by section 1807(1) of this Act (amending section 1981d(b)(1) of this title) shall (Pub. L. 87-128, title III, 8 353A, as added Pub. become effective 120 days after the date of enactment L. 101-624, title XXIII, $ 2384(a), Nov. 28, 1990, of this Act (Nov. 28, 1990).
104 Stat. 4050.)