Title V: Credit

Required borrowers to participate in operation of farm or ranch for at least 3 years to be eligible for direct farm ownership loan.

Provides that any farm experience, no matter when it occurred, must be considered in determining whether applicant meets 3-year experience requirement.

Secretary had authority to operate direct and guaranteed Soil and Water Conservation and Protection Loan Program. Farmers unable to secure credit elsewhere were eligible for loans for soil and water conservation and protection projects. Loan size maximum was set at $50,000.

Replaces previous authority with authorities to make or guarantee loans used to cover costs of qualified conservation projects of eligible borrowers. Projects must be part of USDA-approved conservation plan. Eligible conservation plans may include projects for construction or establishment of conservation structures, forest and permanent cover, water conservation and waste management systems, improved permanent pasture, or other projects that comply with Section 1212 of Food Security Act of 1985, and other purposes approved by Secretary.

Eligible borrowers include farmers, ranchers, and other entities controlled by farmers and ranchers and primarily and directly engaged in agricultural production.

Gives priority to qualified beginning farmers, ranchers, socially disadvantaged farmers or ranchers, owners or tenants who use the loans to convert to sustainable or organic agricultural production systems, and producers who use the loans to build conservation structures or establish conservation practices.

Loan guarantees are 75% of principal amount of loan and loans are to be disbursed geographically to maximum extent possible. Borrowers must be unable to obtain credit elsewhere.

Set direct loan borrowing limit at $200,000.

Increases direct loan borrowing limit to $300,000.

Direct Loan program provided down payment financing to beginning farmers and ranchers for farm purchases. Down payment loans could have been made at 4% fixed rates for up to 15 years at 40% of sale price appraised value.

Adds socially disadvantaged farmers or ranchers to down payment loan program. Also:

• establishes maximum eligible principal amount not to exceed 45% of purchase price, appraised value, or $500,000, whichever is lowest
• ties interest rate to 4% below regular direct farm ownership loan rate to minimum of 1.5%
• increases maximum loan duration from 15 to 20 years
• reduces borrower down payment requirement from 10% to 5%

Requires Secretary to establish annual performance goals to promote use of this program and joint financing arrangements.

Established pilot program to guarantee up to 5 loans per State made by private seller of farm or ranch to qualified beginning farmer or rancher on contract land sale basis, if loan met applicable underwriting criteria and commercial lending institution agreed to serve as escrow agent.

Expands program to include socially disadvantaged farmers or ranchers; makes it permanent and nationwide; and sets minimum down payment for participants of 5%, maximum purchase price of $500,000, and loan period of 10 years. Offers sellers choice of guarantee options.

Required borrowers to participate in operation of farm or ranch for at least 3 years to be eligible for direct farm operating loan.

Provides that any farm experience, no matter when it occurred, must be considered in determining whether applicant meets 3-year experience requirement.

Set direct Loan borrowing limit at $200,000.

Increases borrowing limit to $300,000.

Waived eligibility time limits on guaranteed operating loans through May 2008. Borrowers with direct operating loans were eligible, case-by-case, for a 1-time waiver for 2 additional years of eligibility.

Extends waiver of limitation on number of years that borrowers are eligible to receive guaranteed assistance on operating loans through Dec 31, 2010.

No similar provision.

Specifies eligibility of certain equine farmers and ranchers for emergency loans, subject to all relevant eligibility requirements, including inability to obtain credit elsewhere.

No similar provision.

Establishes New Farmer Individual Development Account (IDA) Pilot Program, which provides for matching-funds savings accounts for beginning farmers or ranchers to be used for specified farming-related expenses. Program to be administered by FSA in at least 15 States. Authorizes funding for program through FY 2012.

Grants for savings accounts to be administered through contract with qualified entity and will require:

• monthly deposit into personal savings by eligible participant
• agreement on eligible expenditures for which savings will be used when contract is completed
• agreement on level of matching of at least 100%, but not more than 200%, of participant's savings

Requires savings-account entities to provide 50% non-Federal match of their grant. Entities may use up to 10% of Federal match for administrative expenses.

Defines eligible beginning farmers and ranchers as those that lack significant assets and have an income that is either below 80% of State's median or below 200% of State's poverty income guidelines. Eligible participants cannot receive more than $6,000 in matching funds for each fiscal year of contract. Participants must also complete financial training established by qualified entity.

Beginning farmers have preference to buy FSA inventory farm property for 135 days before it was offered for sale to other buyers. Inventory properties were to be divided or combined to make them more suitable for these borrowers.

Extends preference to buy FSA inventory property in first 135 days to socially disadvantaged farmers or ranchers. If more than 1 eligible socially disadvantaged or beginning farmer offers to purchase the same property in first 135 days, buyer is to be chosen randomly.

Reserved 70% of available funds for direct ownership loans for beginning farmers and ranchers, of which 60% were reserved for down payment loans. Also reserved 25% of available funds for guaranteed ownership loans and 35% of funds for direct operating loans for beginning farmers and ranchers annually.

Increases loan funds reserved for beginning farmers and ranchers to 75% for direct farm ownership loans, of which two-thirds are reserved for down payment loans and joint financing arrangements. Also reserves 40% of guaranteed farm ownership loans and 50% of direct operating loans for beginning farmers and ranchers.

No similar provision.

Requires that regulations be established to encourage transitioning of borrowers to other sources of credit, including private commercial credit, in shortest practicable period of time.

Consolidated Farm and Rural Development Act of 1990 established right of first refusal of borrower-owner to reacquire homestead property.

Extends right of first refusal to reacquire homestead property to immediate family members of a socially disadvantaged farmer or rancher borrower. Eliminates right of first refusal to reacquire homestead property for farmer or rancher borrowers who are not members of socially disadvantaged groups.

Specified that computation method for assessments by each FCS bank on any of its associations or other financing institutions should be same as that used to compute premium payment and should not exceed sum of 4 different factors specified in the Act.

Changes method that each FCS bank must use to assess associations and other financing institutions to cover costs of making Farm Credit System Insurance Corporation premium payments. Requires that assessments on lenders be computed in an "equitable manner" and that premiums be based on average outstanding insured debt. Makes multiple technical changes in methods for calculating premium amounts, in premium payment processes, and in recordkeeping requirements.

No similar provision.

Authorizes bank for cooperatives board to determine terms and conditions for issuance and transfer of bank voting stock to bank for cooperatives customers and other FCS associations.

No similar provision.

Allows rural utility loans for electric or telephone facilities to be considered as "qualified loans" under Federal Agricultural Mortgage Corporation (Farmer Mac) rules.

No similar provision.

Equalizes lending authorities among FCS associations in Alabama, Mississippi, and Louisiana. Allows Federal land banks or credit associations to make short- and intermediate-term loans, and allows production credit associations to make long-term loans.

No similar provision.

Provides for discretionary authority to make and insure loans to eligible purchasers of highly fractioned lands in relation to relevant provisions of Indian Land Consolidation Act. Eligible purchasers are Indian tribal members.