528 
shall offer to restructure the loan obligations of 
the borrower under this subtitle through pri-
mary loan service programs that would enable 
the borrower to meet the obligations (as modi-
fied) under the loan and to continue the farm-
ing operations of the borrower. 
‘‘(B) RESTRUCTURING.—If the borrower 
accepts an offer under subparagraph (A), not 
later than 45 days after receipt of notice of ac-
ceptance, the Secretary shall restructure the 
loan accordingly. 
‘‘(6) TERMINATION OF LOAN OBLIGATIONS.— 
The obligations of a borrower to the Secretary under 
a loan shall terminate if— 
‘‘(A) the borrower satisfies the require-
ments of paragraphs (1) and (2) of subsection 
(b); 
‘‘(B) the value of the restructured loan is 
less than the recovery value; and 
‘‘(C) not later than 90 days after receipt 
of the notification described in paragraph 
(4)(B), the borrower pays (or obtains third- 
party financing to pay) the Secretary an 
amount equal to the current market value. 
‘‘(7) NEGOTIATION OF APPRAISAL.— 
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529 
‘‘(A) IN
GENERAL.—In making a deter-
mination concerning restructuring under this 
subsection, the Secretary, at the request of the 
borrower, shall enter into negotiations with the 
borrower concerning appraisals required under 
this subsection. 
‘‘(B) INDEPENDENT APPRAISAL.— 
‘‘(i) IN
GENERAL.—If the borrower, 
based on a separate current appraisal, ob-
jects to the decision of the Secretary re-
garding an appraisal, the borrower and the 
Secretary shall mutually agree, to the ex-
tent practicable, on an independent ap-
praiser who shall conduct another ap-
praisal of the property of the borrower. 
‘‘(ii) VALUE OF FINAL APPRAISAL.— 
The average of the 2 appraisals under 
clause (i) that are closest in value shall be-
come the final appraisal under this para-
graph. 
‘‘(iii) COST OF APPRAISAL.—The bor-
rower and the Secretary shall each pay 1⁄2 
of the cost of any independent appraisal. 
‘‘(d) PRINCIPAL AND INTEREST WRITE-DOWN.— 
‘‘(1) IN GENERAL.— 
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530 
‘‘(A) PRIORITY
CONSIDERATION.—In se-
lecting the restructuring alternatives to be used 
in the case of a borrower who has requested re-
structuring under this section, the Secretary 
shall give priority consideration to the use of a 
principal and interest write-down if other credi-
tors of the borrower (other than any creditor 
who is fully collateralized) representing a sub-
stantial portion of the total debt of the bor-
rower held by the creditors of the borrower, 
agree to participate in the development of the 
restructuring plan or agree to participate in a 
State mediation program. 
‘‘(B) 
FAILURE
OF
CREDITORS
TO 
AGREE.—Failure of creditors to agree to par-
ticipate in the restructuring plan or mediation 
program shall not preclude the use of a prin-
cipal and interest write-down by the Secretary 
if the Secretary determines that restructuring 
results in the least cost to the Secretary. 
‘‘(2) PARTICIPATION
OF
CREDITORS.—Before 
eliminating the option to use debt write-down in the 
case of a borrower, the Secretary shall make a rea-
sonable effort to contact the creditors of the bor-
rower, either directly or through the borrower, and 
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531 
encourage the creditors to participate with the Sec-
retary in the development of a restructuring plan for 
the borrower. 
‘‘(e) SHARED APPRECIATION ARRANGEMENTS.— 
‘‘(1) IN GENERAL.—As a condition of restruc-
turing a loan in accordance with this section, the 
borrower of the loan may be required to enter into 
a shared appreciation arrangement that requires the 
repayment of amounts written off or set aside. 
‘‘(2) TERMS.—A shared appreciation agreement 
shall— 
‘‘(A) have a term not to exceed 10 years; 
and 
‘‘(B) provide for recapture based on the 
difference between the appraised values of the 
real security property at the time of restruc-
turing and at the time of recapture. 
‘‘(3) 
PERCENTAGE
OF
RECAPTURE.—The 
amount of the appreciation to be recaptured by the 
Secretary shall be— 
‘‘(A) 75 percent of the appreciation in the 
value of the real security property if the recap-
ture occurs not later than 4 years after the date 
of restructuring; and 
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532 
‘‘(B) 50 percent if the recapture occurs 
during the remainder of the term of the agree-
ment. 
‘‘(4) TIME
OF
RECAPTURE.—Recapture shall 
take place on the date that is the earliest of— 
‘‘(A) the end of the term of the agreement; 
‘‘(B) the conveyance of the real security 
property; 
‘‘(C) the repayment of the loans; or 
‘‘(D) the cessation of farming operations 
by the borrower. 
‘‘(5) TRANSFER OF TITLE.—Transfer of title to 
the spouse of a borrower on the death of the bor-
rower shall not be treated as a conveyance for the 
purpose of paragraph (4). 
‘‘(6) NOTICE OF RECAPTURE.—Not later than 
12 months before the end of the term of a shared 
appreciation arrangement, the Secretary shall notify 
the borrower involved of the provisions of the ar-
rangement. 
‘‘(7) FINANCING OF RECAPTURE PAYMENT.— 
‘‘(A) IN
GENERAL.—The Secretary may 
amortize a recapture payment owed to the Sec-
retary under this subsection. 
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