(a) In general

The Secretary shall make or insure no loan under this subchapter—

(1) that would cause the total principal indebtedness outstanding at any one time for loans made under this subchapter to any one borrower to exceed, in the case of a loan other than a loan guaranteed by the Secretary, $400,000, or, in the case of a loan guaranteed by the Secretary, $1,750,000 (increased, beginning with fiscal year 2019, by the inflation percentage applicable to the fiscal year in which the loan is guaranteed and reduced by the unpaid indebtedness of the borrower on loans under the sections specified in section 1925 of this title that are guaranteed by the Secretary); or

(2) for the purchasing or leasing of land other than for cash rent, or for carrying on any land leasing or land purchasing program.

(b) Inflation percentage

Terms Used In 7 USC 1943

  • borrower: means any farm borrower who has outstanding obligations to the Secretary under any farmer program loan, without regard to whether the loan has been accelerated, but does not include any farm borrower all of whose loans and accounts have been foreclosed on or liquidated, voluntarily or otherwise. See 7 USC 1991
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • insure: as used in this chapter includes guarantee, which means to guarantee the payment of a loan originated, held, and serviced by a private financial agency or other lender approved by the Secretary. See 7 USC 1991

For purposes of this section, the inflation percentage applicable to a fiscal year is the percentage (if any) by which—

(1) the average of the Prices Paid By Farmers Index (as compiled by the National Agricultural Statistics Service of the Department of Agriculture) for the 12-month period ending on July 31 of the immediately preceding fiscal year; exceeds

(2) the average of such index (as so defined) for the 12-month period that immediately precedes the 12-month period described in paragraph (1).

(c) Microloans

(1) In general

Subject to paragraph (2), the Secretary may establish a program to make or guarantee microloans.

(2) Limitations

The Secretary shall not make or guarantee a microloan under this subsection that would cause the total principal indebtedness outstanding at any 1 time for microloans made under this subsection to any 1 borrower to exceed $50,000.

(3) Applications

To the maximum extent practicable, the Secretary shall limit the administrative burdens and streamline the application and approval process for microloans under this subsection.

(4) Cooperative lending pilot projects

(A) In general

Subject to subparagraph (B), during each of the 2014 through 2023 fiscal years, the Secretary may carry out a pilot project to make loans to community development financial institutions, as the Secretary determines appropriate—

(i) to make or guarantee microloans consistent with the terms provided under this subsection; and

(ii) to provide business, financial, marketing, and credit management services to microloan borrowers.

(B) Requirements

Prior to making a loan to an institution described in subparagraph (A), the Secretary shall—

(i) review and approve—

(I) the loan loss reserve fund for microloans established by the institution; and

(II) the underwriting standards for microloans of the institution; and


(ii) establish such other requirements for making a loan to the institution as the Secretary determines necessary.

(C) Eligibility

To be eligible for a loan under subparagraph (A), an institution described in subparagraph (A) shall, as determined by the Secretary—

(i) have the legal authority necessary to carry out the actions described in subparagraph (A);

(ii) have a proven track record of successfully assisting agricultural borrowers; and

(iii) have the services of a staff with appropriate loan making and servicing expertise.

(D) Oversight

Not less often than annually, on a date determined by the Secretary, an institution that has a loan under this paragraph shall provide to the Secretary such information as the Secretary may require to ensure that the services provided by the institution are serving the purposes of this subsection.

(E) Limitation

The Secretary shall not make more than $10,000,000 in loans under this paragraph in any fiscal year.

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