§ 1922. — Persons eligible for loans.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC1922]
TITLE 7--AGRICULTURE
CHAPTER 50--AGRICULTURAL CREDIT
SUBCHAPTER I--REAL ESTATE LOANS
Sec. 1922. Persons eligible for loans
(a) Authorization and conditions
The Secretary is authorized to make and insure loans under this
subchapter to farmers and ranchers in the United States, and to farm
cooperatives and private domestic corporations, partnerships, joint
operations, trusts, and limited liability companies that are controlled
by farmers and ranchers and engaged primarily and directly in farming or
ranching in the United States, subject to the conditions specified in
this section. To be eligible for such loans, applicants who are
individuals, or, in the case of cooperatives, corporations,
partnerships, joint operations, trusts, and limited liability companies,
individuals holding a majority interest in such entity, must (1) be
citizens of the United States, (2) for direct loans only, have either
training or farming experience that the Secretary determines is
sufficient to assure reasonable prospects of success in the proposed
farming operations, (3) be or will become owner-operators of not larger
than family farms (or in the case of cooperatives, corporations,
partnerships, joint operations, trusts, and limited liability companies
in which a majority interest is held by individuals who are related by
blood or marriage, as defined by the Secretary, such individuals must be
or will become either owners or operators of not larger than a family
farm and at least one such individual must be or will become an operator
of not larger than a family farm or, in the case of holders of the
entire interest who are related by blood or marriage and all of whom are
or will become farm operators, the ownership interest of each such
holder separately constitutes not larger than a family farm, even if
their interests collectively constitute larger than a family farm, as
defined by the Secretary), and (4) be unable to obtain sufficient credit
elsewhere to finance their 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. In addition to the foregoing
requirements of this section, in the case of corporations, partnerships,
joint operations, trusts, and limited liability companies, the family
farm requirement of clause (3) of the preceding sentence shall apply as
well to the farm or farms in which the entity has an ownership and
operator interest and the requirement of clause (4) of the preceding
sentence shall apply as well to the entity in the case of cooperatives,
corporations, partnerships, joint operations, trusts, and limited
liability companies.
(b) Direct loans
(1) In general
Subject to paragraph (3), the Secretary may make a direct loan
under this subchapter only to a farmer or rancher who has
participated in the business operations of a farm or ranch for not
less than 3 years and--
(A) is a qualified beginning farmer or rancher;
(B) has not received a previous direct farm ownership loan
made under this subchapter; or
(C) has not received a direct farm ownership loan under this
subchapter more than 10 years before the date the new loan would
be made.
(2) Youth loans
The operation of an enterprise by a youth under section 1941(b)
of this title shall not be considered the operation of a farm or
ranch for purposes of paragraph (1).
(3) Transition rule
(A) In general
Subject to subparagraphs (B) and (C), the Secretary may make
a direct loan under this subchapter to a farmer or rancher who
has a direct loan outstanding under this subchapter on April 4,
1996.
(B) Less than 5 years
If, as of April 4, 1996, a farmer or rancher has had a
direct loan outstanding under this subchapter for less than 5
years, the Secretary shall not make a loan to the farmer or
rancher under subparagraph (A) after the date that is 10 years
after April 4, 1996.
(C) 5 years or more
If, as of April 4, 1996, a farmer or rancher has had a
direct loan outstanding under this subchapter for 5 years or
more, the Secretary shall not make a loan to the farmer or
rancher under subparagraph (A) after the date that is 5 years
after April 4, 1996.
(D) Notice
Beginning with fiscal year 2000 not later than 12 months
before a borrower will become ineligible for direct loans under
this subchapter by reason of this paragraph, the Secretary shall
notify the borrower of such impending ineligibility.
(Pub. L. 87-128, title III, Sec. 302, Aug. 8, 1961, 75 Stat. 307; Pub.
L. 91-620, Sec. 2, Dec. 31, 1970, 84 Stat. 1862; Pub. L. 95-334, title
I, Sec. 101, Aug. 4, 1978, 92 Stat. 420; Pub. L. 97-98, title XVI,
Sec. 1601(a), Dec. 22, 1981, 95 Stat. 1346; Pub. L. 99-198, title XIII,
Secs. 1301(a), 1302(a), 1303, Dec. 23, 1985, 99 Stat. 1518, 1519; Pub.
L. 104-127, title VI, Sec. 601, Apr. 4, 1996, 110 Stat. 1084; Pub. L.
105-277, div. A, Sec. 101(a) [title VIII, Secs. 804, 805(1)], Oct. 21,
1998, 112 Stat. 2681, 2681-39; Pub. L. 107-171, title V, Secs. 5001,
5302(a), May 13, 2002, 116 Stat. 341, 344.)
Amendments
2002--Subsec. (a). Pub. L. 107-171, Sec. 5302(a), substituted
``joint operations, trusts, and limited liability companies'' for ``and
joint operations'' wherever appearing.
Subsec. (b)(1). Pub. L. 107-171, Sec. 5001, substituted
``participated in the business operations of'' for ``operated'' in
introductory provisions.
1998--Subsec. (a). Pub. L. 105-277, Sec. 101(a) [title VIII,
Sec. 805(1)], inserted ``for direct loans only,'' before ``have either''
in cl. (2).
Subsec. (b)(3)(D). Pub. L. 105-277, Sec. 101(a) [title VIII,
Sec. 804], added subpar. (D).
1996--Subsec. (b). Pub. L. 104-127 added subsec. (b) and struck out
former subsec. (b) which read as follows: ``The Secretary may not
restrict eligibility for loans made or insured under this subchapter for
purposes set forth in section 1923 of this title solely to borrowers of
loans that are outstanding on December 23, 1985.''
1985--Subsec. (a). Pub. L. 99-198, Secs. 1301(a), 1302(a)(1),
designated existing provisions as subsec. (a) and substituted--
(1) ``, partnerships, and joint operations'' for ``and
partnerships'' wherever appearing after ``corporations'';
(2) ``, partnerships, and joint operations'' for ``, and
partnerships'' wherever appearing after ``corporations''; and
(3) ``individuals'' for ``members, stockholders, or partners, as
applicable,'' wherever appearing.
Pub. L. 99-198, Sec. 1303, in cl. (3) parenthetical, inserted
provision treating blood or marriage related owner-operators of the
entire farm interest as separate interest holders of not larger than
family farms though collective ownership constitutes a larger than a
family farm.
Subsec. (b). Pub. L. 99-198, Sec. 1302(a)(2), added subsec. (b).
1981--Pub. L. 97-98 substituted ``corporations and partnerships, the
family farm'' for ``cooperatives, corporations, and partnerships, the
family farm'', and inserted ``in the case of cooperatives, corporations,
and partnerships'' at end.
1978--Pub. L. 95-334 substituted provisions setting forth
eligibility criteria for loans to farmers and ranchers in the United
States, and to farm cooperatives and private domestic corporations and
partnerships controlled by farmers and ranchers and engaged primarily
and directly in farming or ranching in the United States, for provisions
setting forth eligibility criteria for loans to farmers and ranchers in
the United States, Puerto Rico, and the Virgin Islands.
1970--Pub. L. 91-620 provided that with respect to veterans as
defined in section 1983(e) of this title, a farm background shall not be
required as a condition precedent to obtaining any loan.
Effective Date of 1996 Amendment
Section 663 of title VI of Pub. L. 104-127 provided that:
``(a) In General.--Except as provided in subsection (b), the
amendments made by this title [enacting sections 2008g to 2008i of this
title, amending this section and sections 1631, 1923, 1924, 1927, 1928,
1929, 1929a, 1932, 1934, 1941, 1942, 1946, 1949, 1961 to 1964, 1981,
1981d, 1983, 1983a, 1985, 1991, 1992, 1994, 1997, 1999, 2000, 2001,
2002, and 2003 of this title, repealing sections 1936, 1945, 1947, 1948,
and 1968 of this title, and repealing provisions set out as a note under
section 1999 of this title] shall become effective on the date of
enactment of this Act [Apr. 4, 1996].
``(b) Delayed Effective Dates.--The amendments made by sections 601,
606, 611, 612, 622, 623, 625, 633, 640(1), 642, 645(1), 648(a), and 649
[enacting sections 2008g and 2008i of this title and amending this
section and sections 1929, 1941, 1942, 1962, 1963, 1964, 1981d, 1991,
1997, and 2001 of this title] shall become effective 90 days after the
date of enactment of this Act [Apr. 4, 1996].
``(c) Transition Provision.--The amendments made by sections 638 and
644 [amending sections 1985 and 2000 of this title] shall not apply with
respect to a complete application to acquire inventory property
submitted prior to the date of enactment of this Act [Apr. 4, 1996].
``(d) Regulations.--Notwithstanding any other provision of law,
regulations to implement the amendments made by this title shall be
published as interim final rules with request for comments and may be
made effective immediately on publication.''
Effective Date of 1981 Amendment
Amendment by Pub. L. 97-98 effective Dec. 22, 1981, see section 1801
of Pub. L. 97-98, set out as an Effective Date note under section 4301
of this title.
Evaluations of Direct and Guaranteed Loan Programs
Pub. L. 107-171, title V, Sec. 5301, May 13, 2002, 116 Stat. 344,
provided that:
``(a) Studies.--The Secretary of Agriculture shall conduct 2 studies
of the direct and guaranteed loan progams [sic] under sections 302 and
311 of the Consolidated Farm and Rural Development Act [7 U.S.C. 1922
and 1941], each of which shall include an examination of the number,
average principal amount, and delinquency and default rates of loans
provided or guaranteed during the period covered by the study.
``(b) Periods Covered.--
``(1) First study.--One study under subsection (a) shall cover
the 1-year period that begins 1 year after the date of the enactment
of this section [May 13, 2002].
``(2) Second study.--One study under subsection (a) shall cover
the 1-year period that begins 3 years after such date of enactment.
``(c) Reports to the Congress.--At the end of the period covered by
each study under this section, the Secretary of Agriculture shall submit
to the Congress a report that contains an evaluation of the results of
the study, including an analysis of the effectiveness of loan programs
referred to in subsection (a) in meeting the credit needs of
agricultural producers in an efficient and fiscally responsible
manner.''
Section Referred to in Other Sections
This section is referred to in sections 1925, 1934, 1983, 1994,
2006a of this title.
