524 
sumptions that demonstrate that the borrower will 
be able— 
‘‘(A) to meet the necessary family living 
and farm operating expenses of the borrower; 
and 
‘‘(B) to service all debts of the borrower, 
including restructured loans; and 
‘‘(4) the loan, if restructured, shall result in a 
net recovery to the Federal Government, during the 
term of the loan as restructured, that would be more 
than or equal to the net recovery to the Federal 
Government from an involuntary liquidation or fore-
closure on the property securing the loan. 
‘‘(c) RESTRUCTURING DETERMINATIONS.— 
‘‘(1) DETERMINATION OF NET RECOVERY.—In 
determining the net recovery from the involuntary 
liquidation of a loan under this section, the Sec-
retary shall calculate— 
‘‘(A) the recovery value of the collateral se-
curing the loan, in accordance with paragraph 
(2); and 
‘‘(B) the value of the restructured loan, in 
accordance with paragraph (3). 
‘‘(2) RECOVERY VALUE.—For the purpose of 
paragraph (1), the recovery value of the collateral 
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securing the loan shall be based on the difference be-
tween— 
‘‘(A)(i) the amount of the current ap-
praised value of the interests of the borrower in 
the property securing the loan; and 
‘‘(ii) the value of the interests of the bor-
rower in all other assets that are— 
‘‘(I) not essential for necessary family 
living expenses; 
‘‘(II) not essential to the operation of 
the farm; and 
‘‘(III) not exempt from judgment 
creditors or in a bankruptcy action under 
Federal or State law; 
‘‘(B) the estimated administrative, attor-
ney, and other expenses associated with the liq-
uidation and disposition of the loan and collat-
eral, including— 
‘‘(i) the payment of prior liens; 
‘‘(ii) taxes and assessments, deprecia-
tion, management costs, the yearly per-
centage decrease or increase in the value of 
the property, and lost interest income, each 
calculated for the average holding period 
for the type of property involved; 
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‘‘(iii) resale expenses, such as repairs, 
commissions, and advertising; and 
‘‘(iv) other administrative and attor-
ney costs; and 
‘‘(C) the value, as determined by the Sec-
retary, of any property not included in subpara-
graph (A)(i) if the property is specified in any 
security agreement with respect to the loan and 
the Secretary determines that the value of the 
property should be included for purposes of this 
section. 
‘‘(3) VALUE OF THE RESTRUCTURED LOAN.— 
‘‘(A) IN
GENERAL.—For the purpose of 
paragraph (1), the value of the restructured 
loan shall be based on the present value of pay-
ments that the borrower would make to the 
Federal Government if the terms of the loan 
were modified under any combination of pri-
mary loan service programs to ensure that the 
borrower is able to meet the obligations and 
continue farming operations. 
‘‘(B) PRESENT VALUE.—For the purpose 
of calculating the present value referred to in 
subparagraph (A), the Secretary shall use a dis-
count rate of not more than the current rate at 
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