§ 2018. — Security; terms.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC2018]
TITLE 12--BANKS AND BANKING
CHAPTER 23--FARM CREDIT SYSTEM
SUBCHAPTER I--FARM CREDIT BANKS
Sec. 2018. Security; terms
(a) Real estate loans
(1) Maximum level of loans
(A) In general
Real estate mortgage loans originated by a Farm Credit Bank,
or in which a Farm Credit Bank participates in with a lender
that is not a System institution, shall not exceed 85 percent of
the appraised value of the real estate security, except as
provided for in subparagraphs (C) and (D).
(B) Regulation
The Farm Credit Administration may, by regulation, require
that loans not exceed 75 percent of the appraised value of the
real estate security.
(C) Guaranteed loans
If the loan is guaranteed by Federal, State, or other
governmental agencies, the loan may not exceed 97 percent of the
appraised value of the real estate security, as may be
authorized under regulations of the Farm Credit Administration.
(D) Private mortgage insurance
A loan on which private mortgage insurance is obtained may
exceed 85 percent of the appraised value of the real estate
security to the extent that the loan amount in excess of such 85
percent is covered by the insurance.
(2) Security
All loans originated or participated in by a bank under this
section shall be secured by first liens on interests in real estate
of such classes as may be prescribed by regulations of the Farm
Credit Administration.
(3) Value of security
To adequately secure the loan, the value of security shall be
determined by appraisal under standards prescribed by the bank in
accordance with regulations of the Farm Credit Administration.
(4) Additional security
Additional security for any loan may be required by the bank to
supplement real estate security. Credit factors, other than the
ratio between the amount of the loan and the security value, shall
be given due consideration.
(b) Intermediate credit
Loans, other than real estate loans, and discounts made under the
provisions of this subchapter shall be repayable in not more than 7
years (15 years if made to producers or harvesters of aquatic products)
from the time that such are made or discounted by the Farm Credit Bank,
except that the Board of Directors, under regulations of the Farm Credit
Administration, may approve policies permitting loans, advances, or
discounts (other than those made to producers or harvesters of aquatic
products) to be repayable in not more than 10 years from the time that
such are made or discounted by such bank.
(Pub. L. 92-181, title I, Sec. 1.10, as added Pub. L. 100-233, title IV,
Sec. 401, Jan. 6, 1988, 101 Stat. 1627; amended Pub. L. 100-399, title
IV, Sec. 401(h), (i), Aug. 17, 1988, 102 Stat. 996; Pub. L. 104-105,
title II, Secs. 202, 203, Feb. 10, 1996, 110 Stat. 172.)
Prior Provisions
A prior section 2018, Pub. L. 92-181, title I, Sec. 1.10, Dec. 10,
1971, 85 Stat. 586; Pub. L. 96-592, title I, Sec. 107, Dec. 24, 1980, 94
Stat. 3438, related to purposes, prior to the general amendment of this
subchapter by Pub. L. 100-233, Sec. 401.
Amendments
1996--Subsec. (a)(1)(A). Pub. L. 104-105, Sec. 202(b), substituted
``subparagraphs (C) and (D)'' for ``paragraphs (2) and (3)''.
Subsec. (a)(1)(D). Pub. L. 104-105, Sec. 202(a), added subpar. (D).
Subsec. (a)(5). Pub. L. 104-105, Sec. 203, struck out heading and
text of par. (5). Text read as follows: ``Each Farm Credit Bank shall
require a financial statement from each borrower at least once every 3
years, or during such shorter period of time as may be required under
regulations of the Farm Credit Administration.''
1988--Subsec. (a)(2). Pub. L. 100-399, Sec. 401(h)(1), substituted
``prescribed by regulations of'' for ``approved by''.
Subsec. (a)(3). Pub. L. 100-399, Sec. 401(h)(2), substituted ``under
standards'' for ``under appraisal standards'' and ``in accordance with
regulations of'' for ``and approved by''.
Subsec. (b). Pub. L. 100-399, Sec. 401(i), substituted ``harvesters
of aquatic products) from'' for ``harvester of aquatic products) from''.
Effective Date of 1988 Amendment
Amendment by Pub. L. 100-399 effective immediately after amendment
made by section 401 of Pub. L. 100-233, which was effective 6 months
after Jan. 6, 1988, see section 1001(b) of Pub. L. 100-399, set out as a
note under section 2002 of this title.
