12 U.S.C. § 2279aa–8 — Standards for qualified loans
submitted 38 years ago by Pub. L. 92-181 to r/title-12-BANKS-AND-BANKING · 424 words · no verdicts yet
The Corporation sets standards for qualified agricultural mortgage loans. The standards must address underwriting, appraisals, repayment, borrower cash flow, agricultural use, loan size, and fair treatment of small originators and loans.
(a) Standards. (1) The Corporation* must set underwriting, security-appraisal, and repayment standards for qualified loans, accounting for differences among loan categories. (2) Farm Credit* Administration authorities under section 2279aa–11 apply to the standards. (3) So far as practical, the Corporation must limit operations to mortgage loans that the Board* considers generally and substantially high enough quality to meet private institutional mortgage investors’ purchase standards. (b) For loans secured by agricultural real estate*, standards must at least (1) exclude loans with a loan-to-value ratio above 80 percent; (2) require enough borrower cash flow to adequately service the loan; (3) require enough documentation; (4) protect appraisal integrity; (5) ensure the farmer or rancher is or will be actively engaged in agricultural production and require certification to the originator* of the intent to continue production on the farm or ranch; (6) minimize speculation in agricultural real estate for nonagricultural purposes; and (7) consider the property’s tax purpose when valuing it. (c)(1) A loan secured by agricultural real estate is not qualified if its principal exceeds $2,500,000, adjusted for inflation, except as in (2). (2) That limit does not apply if the agricultural real estate securing the loan totals no more than 2,000 acres. (d) Standards may not discriminate against small originators or small agricultural mortgage loans of at least $50,000. The Board must promote and encourage qualified loans for small farms and family farmers in the agricultural mortgage secondary market.
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.
The standards shall be subject to the authorities of the Farm Credit* Administration under section 2279aa–11 of this title.
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.
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—
provide that no agricultural mortgage loan with a loan-to-value ratio in excess of 80 percent may be treated as a qualified loan*;
require each borrower to demonstrate sufficient cash-flow to adequately service the agricultural mortgage loan;
contain sufficient documentation standards;
contain adequate standards to protect the integrity of the appraisal process with respect to any agricultural mortgage loans;
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;
minimize speculation in agricultural real estate for nonagricultural purposes; and
in establishing the value of agricultural real estate, consider the purpose for which the real estate is taxed.
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).
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.
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.
Source credit: (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.)
- 1988Enacted · Pub. L. 92-181 · 101 Stat. 1700
- 1988Amended · Pub. L. 100-399 · 102 Stat. 1005
- 1996Amended · Pub. L. 104-105 · 110 Stat. 165
- 2008Amended · Pub. L. 110-234 · 122 Stat. 1158
- 2008Amended · Pub. L. 110-246 · 122 Stat. 1664, 1920
- 2018Amended · Pub. L. 115-334 · 132 Stat. 4678
A history note hasn’t been published yet. The record shows enactment by Pub. L. 92-181 on 1988-01-06.
all 0 arguments · sorted by: best
no arguments yet — make the first case