449 
the total cost of any tax and insurance in-
curred during the period covered by the 
annual installments); or 
‘‘(B) a standard guarantee plan, which 
shall cover an amount equal to 90 percent of 
the outstanding principal of the loan. 
‘‘(2) ELIGIBILITY FOR STANDARD GUARANTEE 
PLAN.—To be eligible for a standard guarantee plan 
referred to in paragraph (1)(B), a private seller 
shall— 
‘‘(A) secure a commercial lending institu-
tion or similar entity, as determined by the Sec-
retary, to serve as an escrow agent; or 
‘‘(B) in cooperation with the farmer, use 
an appropriate alternate arrangement, as deter-
mined by the Secretary. 
‘‘CHAPTER 2—OPERATING LOANS 
‘‘SEC. 3201. OPERATING LOANS. 
‘‘(a) IN GENERAL.—The Secretary may make or 
guarantee an operating loan under this chapter to an eligi-
ble farmer in the United States. 
‘‘(b) ELIGIBILITY.—A farmer shall be eligible under 
subsection (a) only— 
‘‘(1) if the farmer, or an individual holding a 
majority interest in the farmer— 
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‘‘(A) is a citizen of the United States; and 
‘‘(B) has training or farming experience 
that the Secretary determines is sufficient to 
ensure a reasonable prospect of success in the 
farming operation proposed by the farmer; 
‘‘(2) in the case of a farmer that is an indi-
vidual, if the farmer is or proposes to become an op-
erator of a farm that is not larger than a family 
farm; 
‘‘(3) in the case of a farmer that is a coopera-
tive, corporation, partnership, trust, limited liability 
company, joint operation, or such other legal entity 
as the Secretary determines to be appropriate, with 
respect to the entity and each farm in which the en-
tity has an ownership or operator interest— 
‘‘(A) if— 
‘‘(i) a majority interest is held by in-
dividuals who are related by blood or mar-
riage, as defined by the Secretary; 
‘‘(ii) at least 1 of the individuals is or 
will be the operator of the farm; and 
‘‘(iii) the farm is not larger than a 
family farm; 
‘‘(B) if— 
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‘‘(i) all of the individuals who are or 
propose to become owners or operators of 
a farm are related by blood or marriage; 
‘‘(ii) all of the individuals are or pro-
pose to become operators of the farm; and 
‘‘(iii) each of the interests of the indi-
viduals separately constitutes not larger 
than a family farm even if the ownership 
interests of the individuals collectively con-
stitute larger than a family farm; or 
‘‘(C) if— 
‘‘(i) the entire interest is not held by 
individuals who are related by blood or 
marriage, as defined by the Secretary; 
‘‘(ii) all of the individuals are or pro-
pose to become farm operators; and 
‘‘(iii) the farm is not larger than a 
family farm; 
‘‘(4) in the case of an operator described in 
paragraph (3) that is owned, in whole or in part by 
1 or more other entities, if not less than 75 percent 
of the ownership interests of each other entity is 
owned directly or indirectly by 1 or more individuals 
who own the family farm; and 
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‘‘(5) if the farmer (or in the case of a farmer 
that is an entity, the 1 or more individuals that hold 
a majority interest in the entity) is unable to obtain 
credit elsewhere. 
‘‘(c) DIRECT LOANS.— 
‘‘(1) IN GENERAL.—The Secretary may make a 
direct loan under this chapter only to a farmer 
who— 
‘‘(A) is a qualified beginning farmer; 
‘‘(B) has not received a previous direct op-
erating loan made under this chapter; or 
‘‘(C) has not received a direct operating 
loan made under this chapter for a total of 10 
years, plus any year the farmer or rancher did 
not receive a direct operating loan after the 
year in which the borrower initially received a 
direct operating loan under this chapter, as de-
termined by the Secretary. 
‘‘(2) YOUTH
LOANS.—In this subsection, the 
term ‘direct operating loan’ shall not include a loan 
made to a youth under subsection (d). 
‘‘(3) WAIVERS.— 
‘‘(A) 
FARM
OPERATIONS
ON
TRIBAL 
LAND.—The Secretary shall waive the limita-
tion under paragraph (1)(C) for a direct loan 
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