§1936 Beginning farmer or rancher and socially disadvantaged farmer or rancher contract land sales program

Summary

The Secretary must guarantee loans that private sellers make to qualified beginning farmers or ranchers and to socially disadvantaged farmers or ranchers who buy a farm or ranch under a contract land sale. Qualified beginning farmer or rancher — a new farmer or rancher who meets the program’s rules. Socially disadvantaged farmer or rancher — a person the program recognizes as from a group that has faced disadvantages. To get a guarantee the buyer must own and run the farm when the sale finishes, have a credit record the Secretary finds acceptable, and show they cannot get enough credit on reasonable terms without the guarantee. The buyer must put at least 5 percent down. The price or appraisal cannot exceed $500,000. The guarantee lasts 10 years. The seller may choose a prompt payment plan that covers 3 annual installments (or the same amount including taxes and insurance for that period) or a standard plan that covers 90 percent of the remaining loan. For the standard plan the seller must use an escrow agent (like a commercial lender) or another approved arrangement with the buyer. The Secretary may phase in these changes, but all must be in place for the 2011 Fiscal Year.