USDA Loan Modernization Act

This Act may be cited as the USDA Loan Modernization Act.

Section 302(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1922(a)) is amended—

(1) in paragraph (1)—

(A) in the matter preceding subparagraph (A), by striking a majority and inserting at least a 50 percent; and

(B) in subparagraph (C), by striking a majority and inserting at least a 50 percent; and

(2) in paragraph (2), by striking subparagraphs (A) and (B) and inserting the following:

Qualified operators, as defined by the Secretary, shall be considered to meet the operator requirement of paragraph (1).

An applicant that is or will become only the operator of farm real estate acquired, improved, or supported with funds under this subtitle shall be considered to meet the owner-operator requirements of paragraph (1) if 1 or more of the individuals who is an owner of the farm real estate owns at least 50 percent (or such other percentage as the Secretary determines is appropriate) of the applicant.

An entity that is an owner-operator described in paragraph (1), or an operator described in subparagraph (B) of this paragraph that is owned, in whole or in part, by 1 or more other entities, shall be considered to meet the direct ownership requirement imposed under paragraph (1) if at least 75 percent of the total ownership interests of the embedded entity, or of the other entities, is owned, directly or indirectly, by qualified operators of the farm acquired, improved, or supported with funds under this subtitle.

(2) .

Section 311(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941(a)) is amended—

(1) in paragraph (1)—

(A) in the matter preceding subparagraph (A), by striking a majority and inserting at least a 50 percent; and

(B) in subparagraph (C), by striking a majority and inserting at least a 50 percent; and

(2) by amending paragraph (2) to read as follows:

Qualified operators, as defined by the Secretary, shall be considered to meet the operator requirement of paragraph (1).

An entity that is an operator described in paragraph (1) that is owned, in whole or in part, by other entities, shall be considered to meet the direct ownership requirement imposed under paragraph (1) if at least 75 percent of the total ownership interests of the embedded entity, or of the other entities, is owned, directly or indirectly, by qualified operators of the farm improved or supported with funds under this subtitle.

(2) .

Section 321 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1961) is amended—

(1) in subsection (a)—

(A) in the first sentence—

(i) by striking (A) and inserting (i);

(ii) by striking (B) and inserting (ii);

(iii) by striking (1) and inserting (A);

(iv) by striking (2) and inserting (B); and

(v) by striking a majority each place it appears and inserting at least a 50 percent;

(B) in the second sentence, by striking this subsection and inserting this paragraph;

(C) by striking the fifth sentence; and

(D) by adding at the end the following:

Qualified operators, as defined by the Secretary, shall be considered to meet the operator requirement of paragraph (1).

An applicant that is or will become only the operator of farm real estate acquired, improved, or supported with funds under this subtitle shall be considered to meet the owner-operator requirements of paragraph (1) if 1 or more of the individuals who is an owner of the real estate owns at least 50 percent (or such other percentage as the Secretary determines is appropriate) of the applicant.

An entity that is an owner-operator described in paragraph (1), or an operator described in subparagraph (B) of this paragraph that is owned, in whole or in part, by 1 or more other entities, shall be considered to meet the direct ownership requirement imposed under paragraph (1) if at least 75 percent of the total ownership interests of the embedded entity, or of the other entities, is owned, directly or indirectly, by qualified operators of the farm acquired, improved, or supported with funds under this subtitle.

(D) ; and

(2) by striking the section designation and all that follows through shall make and insure in the first sentence of the matter preceding paragraph (2) of subsection (a) and inserting the following:

The Secretary shall make and insure

(2) .