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7 U.S.C. § 1923

Title 7 Chapter 50 Current through PL 119-73 Last updated: March 29, 2026 View on OLRC →
Sections in this chapter

§ 1923. Purposes of loans

  • (a)
    • (1) A farmer or rancher may use a direct loan made under this subchapter only for—
      • (A) acquiring or enlarging a farm or ranch;
      • (B) making capital improvements to a farm or ranch;
      • (C) paying loan closing costs related to acquiring, enlarging, or improving a farm or ranch;
      • (D) paying for activities to promote soil and water conservation and protection described in section 1924 of this title on a farm or ranch; or
      • (E) refinancing a temporary bridge loan made by a commercial or cooperative lender to a farmer or rancher for the acquisition of land for a farm or ranch, if—
        • (i) the Secretary approved an application for a direct farm ownership loan to the farmer or rancher for acquisition of the land; and
        • (ii) funds for direct farm ownership loans under section 1994(b) of this title were not available at the time at which the application was approved.
    • (2) A farmer or rancher may use a loan guaranteed under this subchapter only for—
      • (A) acquiring or enlarging a farm or ranch;
      • (B) making capital improvements to a farm or ranch;
      • (C) paying loan closing costs related to acquiring, enlarging, or improving a farm or ranch;
      • (D) paying for activities to promote soil and water conservation and protection described in section 1924 of this title on a farm or ranch; or
      • (E) refinancing indebtedness.
  • (b) In making or guaranteeing a loan under this subchapter for purchase of a farm or ranch, the Secretary shall give preference to a person who—
    • (1) has a dependent family;
    • (2) to the extent practicable, is able to make an initial down payment on the farm or ranch; or
    • (3) is an owner of livestock or farm or ranch equipment that is necessary to successfully carry out farming or ranching operations.
  • (c)
    • (1) After the Secretary makes the determination required by paragraph (2), the Secretary may not make a loan to a farmer or rancher under this subchapter unless the farmer or rancher has, or agrees to obtain, hazard insurance on any real property to be acquired or improved with the loan.
    • (2) Not later than 180 days after April 4, 1996 , the Secretary shall determine the appropriate level of insurance to be required under paragraph (1).

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