republic-os/legal/us/code/title-07/chapter-50/section-1936.md

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LegalText	7 U.S.C. § 1936	Beginning farmer or rancher and socially disadvantaged farmer or rancher contract land sales program	us	united_states_code	code_section	7	AGRICULTURE	50	AGRICULTURAL CREDIT	1936	7 U.S.C. § 1936	current	119-100	2026-06-26	official	https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc07@119-100.zip	/us/usc/t7/s1936	data/legal/raw/us/code/title-07/usc07.xml	e29aa9fc0ec4635cbfd4db363b9942cdea59314a3ab96aa1f8168f56d578ace3	50edab1679a711653797362c0aeb8f2273303fe473fb7fa16df1ee76bdd6e984	c8a4aa55c2eb8848427433ac0c9304d75eeca4cf8ba27f55859245e39838caf2	2026-07-04	official	legal us-code

7 U.S.C. § 1936 - Beginning farmer or rancher and socially disadvantaged farmer or rancher contract land sales program

Text

(a) In general The Secretary shall, in accordance with this section, guarantee a loan made by a private seller of a farm or ranch to a qualified beginning farmer or rancher or socially disadvantaged farmer or rancher (as defined in section 2003(e)(2) of this title) on a contract land sales basis.

(b) Eligibility In order to be eligible for a loan guarantee under subsection (a)—

(1) the qualified beginning farmer or rancher or socially disadvantaged farmer or rancher shall—

(A) on the date the contract land sale that is subject of the loan is complete, own and operate the farm or ranch that is the subject of the contract land sale;

(B) have a credit history that—

(i) includes a record of satisfactory debt repayment, as determined by the Secretary; and

(ii) is acceptable to the Secretary; and

(C) demonstrate to the Secretary that the farmer or rancher, as the case may be, is unable to obtain sufficient credit without a guarantee to finance any actual need of the farmer or rancher, as the case may be, at a reasonable rate or term; and

(2) the loan shall meet applicable underwriting criteria, as determined by the Secretary.

(c) Limitations (1) Down payment The Secretary shall not provide a loan guarantee under subsection (a) if the contribution of the qualified beginning farmer or rancher or socially disadvantaged farmer or rancher to the down payment for the farm or ranch that is the subject of the contract land sale would be less than 5 percent of the purchase price of the farm or ranch.

(2) Maximum purchase price The Secretary shall not provide a loan guarantee under subsection (a) if the purchase price or the appraisal value of the farm or ranch that is the subject of the contract land sale is greater than $500,000.

(d) Period of guarantee The period during which a loan guarantee under this section is in effect shall be the 10-year period beginning with the date the guarantee is provided.

(e) Guarantee plan (1) Selection of plan A private seller of a farm or ranch who makes a loan that is guaranteed by the Secretary under subsection (a) may select—

(A) a prompt payment guarantee plan, which shall cover—

(i) 3 amortized annual installments; or

(ii) an amount equal to 3 annual installments (including an amount equal to the total cost of any tax and insurance incurred during the period covered by the annual installments); or

(B) a standard guarantee plan, which shall cover an amount equal to 90 percent of the outstanding principal of the loan.

(2) Eligiblity 11 So in original. Probably should be “Eligibility”. for standard guarantee plan In order for a private seller to be eligible for a standard guarantee plan referred to in paragraph (1)(B), the private seller shall—

(A) secure a commercial lending institution or similar entity, as determined by the Secretary, to serve as an escrow agent; or

(B) in cooperation with the farmer or rancher, use an appropriate alternate arrangement, as determined by the Secretary.

(f) Transition from pilot program (1) In general The Secretary may phase-in the implementation of the changes to the Beginning Farmer and Rancher and Socially Disadvantaged Farmer or Rancher Contract Land Sales Program provided for in this section.

(2) Limitation All changes to the Beginning Farmer and Rancher and Socially Disadvantaged Farmer or Rancher Contract Land Sales Program must be implemented for the 2011 Fiscal Year.

(Pub. L. 87–128, title III, § 310F, as added Pub. L. 107–171, title V, § 5006, May 13, 2002, 116 Stat. 342; amended Pub. L. 110–234, title V, § 5005, May 22, 2008, 122 Stat. 1145; Pub. L. 110–246, § 4(a), title V, § 5005, June 18, 2008, 122 Stat. 1664, 1906.)

Notes

Editorial Notes

Codification Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246.

Prior ProvisionsA prior section 1936, Pub. L. 87–128, title III, § 310F, as added Pub. L. 102–554, § 7(b), Oct. 28, 1992, 106 Stat. 4146, related to availability of farm ownership loans and loan guarantees for certain qualified beginning farmers and ranchers, prior to repeal by Pub. L. 104–127, title VI, § 616(b), Apr. 4, 1996, 110 Stat. 1090.

Amendments2008—Pub. L. 110–246, § 5005, amended section generally, substituting provisions relating to guarantee of a loan made by a private seller of a farm or ranch to a qualified beginning farmer or rancher or socially disadvantaged farmer or rancher on a contract land sales basis, for similar provisions relating to a pilot program in fiscal years 2003 through 2007.

Statutory Notes and Related Subsidiaries

Effective Date of 2008 AmendmentAmendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title.