
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 12USC2279aa-8]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
         SUBCHAPTER VIII--AGRICULTURAL MORTGAGE SECONDARY MARKET
 
 Part A--Establishment and Activities of Federal Agricultural Mortgage 
                               Corporation
 
Sec. 2279aa-8. Standards for qualified loans


(a) Standards

    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. 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) of this section 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 borrower 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 site 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 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 1,000 acres.

(d) Congressional review

    No standard prescribed under subsection (a) of this section 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.

(e) Nondiscrimination requirement

    The standards established under subsection (a) of this section 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, Sec. 8.8, as added Pub. L. 100-233, title 
VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1700; amended Pub. L. 100-399, 
title VI, Sec. 601(i), Aug. 17, 1988, 102 Stat. 1005; Pub. L. 104-105, 
title I, Sec. 110, Feb. 10, 1996, 110 Stat. 165.)


                               Amendments

    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''.


                    Effective Date of 1988 Amendment

    Amendment 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.

                  Section Referred to in Other Sections

    This section is referred to in sections 2279aa, 2279aa-6 of this 
title.
