7 U.S.C. § 1935
Section 1935 · Down payment loan program
Current version, with additions and removals from the June 18, 2008 version.
(1) Establishment
(1) Establishment
(2) Administration
(2) Administration
The Secretary shall be the primary coordinator of credit supervision for the down payment loan program established under this section, in consultation with the commercial or cooperative lender and, if applicable, the contracting credit counseling service selected under section 2006b(c) of this title.
The Secretary shall be the primary coordinator of credit supervision for the down payment loan program established under this section, in consultation with the commercial or cooperative lender and, if applicable, the contracting credit counseling service selected under section 2006b(c) of this title.
(1) Principal
(1) Principal
Each loan made under this section shall be in an amount that does not exceed 45 percent of the least of—
Each loan made under this section shall be in an amount that does not exceed 45 percent of the least of—
(A) the purchase price of the farm or ranch to be acquired;
(A) the purchase price of the farm or ranch to be acquired;
(B) the appraised value of the farm or ranch to be acquired; or
(B) the appraised value of the farm or ranch to be acquired; or
The interest rate on any loan made by the Secretary under this section shall be a rate equal to the greater of—
The interest rate on any loan made by the Secretary under this section shall be a rate equal to the greater of—
(A) the difference obtained by subtracting 4 percent from the interest rate for farm ownership loans under this subchapter; or
(A) the difference obtained by subtracting 4 percent from the interest rate for farm ownership loans under this subchapter; or
(B) 1.5 percent.
(B) 1.5 percent.
(2) 1 Interest rate
The interest rate on any loan made by the Secretary under this section shall be 4 percent.
(3) Duration
(3) Duration
Each loan under this section shall be made for a period of 20 years or less, at the option of the borrower.
Each loan under this section shall be made for a period of 20 years or less, at the option of the borrower.
(4) Repayment
(4) Repayment
Each borrower of a loan under this section shall repay the loan to the Secretary in equal annual installments.
Each borrower of a loan under this section shall repay the loan to the Secretary in equal annual installments.
(5) Nature of retained security interest
(5) Nature of retained security interest
The Secretary shall retain an interest in each farm or ranch acquired with a loan made under this section that shall—
The Secretary shall retain an interest in each farm or ranch acquired with a loan made under this section that shall—
(A) be secured by the farm or ranch;
(A) be secured by the farm or ranch;
(B) be junior only to such interests in the farm or ranch as may be conveyed at the time of acquisition to the person (including a lender) from whom the borrower obtained a loan used to acquire the farm or ranch; and
(B) be junior only to such interests in the farm or ranch as may be conveyed at the time of acquisition to the person (including a lender) from whom the borrower obtained a loan used to acquire the farm or ranch; and
(C) require the borrower to obtain the permission of the Secretary before the borrower may grant an additional security interest in the farm or ranch.
(C) require the borrower to obtain the permission of the Secretary before the borrower may grant an additional security interest in the farm or ranch.
(1) Borrowers required to make minimum down payment
(1) Borrowers required to make minimum down payment
The Secretary shall not make a loan under this section to any borrower with respect to a farm or ranch if the contribution of the borrower to the down payment on the farm or ranch will be less than 5 percent of the purchase price of the farm or ranch.
The Secretary shall not make a loan under this section to any borrower with respect to a farm or ranch if the contribution of the borrower to the down payment on the farm or ranch will be less than 5 percent of the purchase price of the farm or ranch.
(2) Prohibited types of financing
(2) Prohibited types of financing
The Secretary shall not make a loan under this section with respect to a farm or ranch if the farm or ranch is to be acquired with other financing that contains any of the following conditions:
The Secretary shall not make a loan under this section with respect to a farm or ranch if the farm or ranch is to be acquired with other financing that contains any of the following conditions:
(A) The financing is to be amortized over a period of less than 30 years.
(A) The financing is to be amortized over a period of less than 30 years.
(B) A balloon payment will be due on the financing during the 20-year period beginning on the date the loan is to be made by the Secretary.
(B) A balloon payment will be due on the financing during the 20-year period beginning on the date the loan is to be made by the Secretary.
In carrying out this section, the Secretary shall, to the maximum extent practicable—
In carrying out this section, the Secretary shall, to the maximum extent practicable—
(1) facilitate the transfer of farms and ranches from retiring farmers and ranchers to persons eligible for insured loans under this subchapter;
(1) facilitate the transfer of farms and ranches from retiring farmers and ranchers to persons eligible for insured loans under this subchapter;
(2) make efforts to widely publicize the availability of loans under this section among—
(2) make efforts to widely publicize the availability of loans under this section among—
(B) retiring farmers and ranchers; and
(B) retiring farmers and ranchers; and
(C) applicants for farm ownership loans under this subchapter;
(C) applicants for farm ownership loans under this subchapter;
(A) beginning farmers or ranchers;
(B) socially disadvantaged farmers or ranchers, as defined in section 2003(e) of this title; or
(C) veteran farmers or ranchers, as defined in section 2279(a) of this title; and; and 1
(1) a qualified beginning farmer or rancher;
(2) a socially disadvantaged farmer or rancher, as defined in section 2003(e) of this title; and
(3) a veteran farmer or rancher, as defined in section 2279(a) of this title.