republic-os/legal/us/code/title-12/chapter-23/section-2279aa-8.md

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LegalText	12 U.S.C. § 2279aa–8	Standards for qualified loans	us	united_states_code	code_section	12	BANKS AND BANKING	23	FARM CREDIT SYSTEM	2279aa–8	12 U.S.C. § 2279aa–8	current	119-100	2026-06-26	official	https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc12@119-100.zip	/us/usc/t12/s2279aa–8	data/legal/raw/us/code/title-12/usc12.xml	3bac40fe3af4abcebf9c5a2d91101371337f24866bf6cf881fce8533f33a210f	e6b98700ef4156ac33fde5d105824845d727afa91a53f3762be2cf4d1a3b01fa	5795ef2d37fec98aca4a65783eeed494325eae03f2ef57d8dbf7d00980562fda	2026-07-04	official	legal us-code

12 U.S.C. § 2279aa–8 - Standards for qualified loans

Text

(a) Standards (1) In general The Corporation shall establish underwriting, security appraisal, and repayment standards for qualified loans taking into account the nature, risk profile, and other differences between different categories of qualified loans.

(2) Supervision, examination, and report of condition The standards shall be subject to the authorities of the Farm Credit Administration under section 2279aa–11 of this title.

(3) Mortgage loans In establishing standards for qualified loans, the Corporation shall confine corporate operations, so far as practicable, to mortgage loans that are deemed by the Board to be of such quality so as to meet, substantially and generally, the purchase standards imposed by private institutional mortgage investors.

(b) Minimum criteria To further the purpose of this subchapter to provide a new source of long-term fixed rate financing to assist farmers and ranchers to purchase agricultural real estate, the standards established by the Board pursuant to subsection (a) with respect to loans secured by agricultural real estate shall, at a minimum—

(1) provide that no agricultural mortgage loan with a loan-to-value ratio in excess of 80 percent may be treated as a qualified loan;

(2) require each borrower to demonstrate sufficient cash-flow to adequately service the agricultural mortgage loan;

(3) contain sufficient documentation standards;

(4) contain adequate standards to protect the integrity of the appraisal process with respect to any agricultural mortgage loans;

(5) contain adequate standards to ensure that the farmer or rancher is or will be actively engaged in agricultural production, and require the borrower to certify to the originator that the borrower intends to continue agricultural production on the farm or ranch involved;

(6) minimize speculation in agricultural real estate for nonagricultural purposes; and

(7) in establishing the value of agricultural real estate, consider the purpose for which the real estate is taxed.

(c) Loan amount limitation (1) In general A loan secured by agricultural real estate may not be treated as a qualified loan if the principal amount of such loan exceeds $2,500,000, adjusted for inflation, except as provided in paragraph (2).

(2) Acreage exception Paragraph (1) shall not apply with respect to any agricultural mortgage loan described in such paragraph if such loan is secured by agricultural real estate that, in the aggregate, comprises not more than 2,000 acres.

(d) Nondiscrimination requirement The standards established under subsection (a) shall not discriminate against small originators or small agricultural mortgage loans that are at least $50,000. The Board shall promote and encourage the inclusion of qualified loans for small farms and family farmers in the agricultural mortgage secondary market.

(Pub. L. 92–181, title VIII, § 8.8, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1700; amended Pub. L. 100–399, title VI, § 601(i), Aug. 17, 1988, 102 Stat. 1005; Pub. L. 104–105, title I, § 110, Feb. 10, 1996, 110 Stat. 165; Pub. L. 110–234, title V, § 5406(c), May 22, 2008, 122 Stat. 1158; Pub. L. 110–246, § 4(a), title V, § 5406(c), June 18, 2008, 122 Stat. 1664, 1920; Pub. L. 115–334, title V, § 5410(a), Dec. 20, 2018, 132 Stat. 4678.)

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.

Amendments2018—Subsec. (c)(2). Pub. L. 115–334 substituted “2,000” for “1,000”. 2008—Subsec. (a). Pub. L. 110–246, § 5406(c)(1), added pars. (1) and (2), designated last sentence as par. (3) and inserted heading, and struck out former first sentence which read as follows: “Not later than 120 days after the appointment and election of the permanent Board, the Corporation, in consultation with originators, shall establish uniform underwriting, security appraisal, and repayment standards for qualified loans.” Subsec. (b). Pub. L. 110–246, § 5406(c)(2)(A), inserted “with respect to loans secured by agricultural real estate” after “subsection (a)” in introductory provisions. Subsec. (b)(5). Pub. L. 110–246, § 5406(c)(2)(B), substituted “ensure that the farmer or rancher” for “ensure that the borrower” and “farm or ranch” for “site”. Subsec. (c)(1). Pub. L. 110–246, § 5406(c)(3), inserted “secured by agricultural real estate” after “A loan”. Subsecs. (d), (e). Pub. L. 110–246, § 5406(c)(4), (5), redesignated subsec. (e) as (d) and struck out former subsec. (d). Prior to amendment, text read as follows: “No standard prescribed under subsection (a) shall take effect before the later of— “(1) the end of a period consisting of 30 legislative days and beginning on the date such standards are submitted to the Congress; or “(2) the end of a period consisting of 90 calendar days and beginning on such date.” 1996—Subsec. (e). Pub. L. 104–105 inserted at end “The Board shall promote and encourage the inclusion of qualified loans for small farms and family farmers in the agricultural mortgage secondary market.” 1988—Subsec. (a). Pub. L. 100–399 inserted “permanent” after “appointment and election of the”.

Statutory Notes and Related Subsidiaries

Effective Date of 2018 AmendmentPub. L. 115–334, title V, § 5410(b), Dec. 20, 2018, 132 Stat. 4678, provided that: “The amendment made by subsection (a) [amending this section] shall take effect 1 year after the date a report submitted in accordance with section 5414 of this Act [132 Stat. 4724] indicates that it is feasible to increase the acreage limitation in section 8.8(c)(2) of the Farm Credit Act of 1971 [12 U.S.C. 2279aa–8(c)(2)] to 2,000 acres [report submitted June 2019].”

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 Title 7, Agriculture.

Effective Date of 1988 AmendmentAmendment by Pub. L. 100–399 effective as if enacted immediately after enactment of Pub. L. 100–233, which was approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100–399, set out as a note under section 2002 of this title.