803 
‘‘SEC. 3902. PURCHASE AND SALE OF GUARANTEED POR-
TIONS OF LOANS. 
‘‘(a) IN GENERAL.—Subject to subsections (b) and 
(c), the Secretary may purchase, on such terms and condi-
tions as the Secretary considers appropriate, the guaran-
teed portion of a loan guaranteed under this title, if the 
Secretary determines that an adequate secondary market 
is not available in the private sector. 
‘‘(b) MAXIMUM PAYMENT.—The Secretary may not 
pay for any guaranteed portion of a loan under subsection 
(a) in excess of an amount equal to the unpaid principal 
balance and accrued interest on the guaranteed portion 
of the loan. 
‘‘(c) SOURCES OF FUNDING.—The Secretary may use 
for the purchases— 
‘‘(1) funds from the Rural Development Insur-
ance Fund with respect to rural development loans 
(as defined in section 3704(a)); and 
‘‘(2) funds from the Agricultural Credit Insur-
ance Fund with respect to all other loans under this 
title. 
‘‘(d) SALE OF GUARANTEED LOANS.— 
‘‘(1) SALES.— 
‘‘(A) REGULATION.— 
‘‘(i) IN
GENERAL.—The guaranteed 
portion of any loan made under this title 
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804 
may be sold by the lender, and by any sub-
sequent holder, in accordance with such 
regulations governing the sales as the Sec-
retary shall establish, subject to clauses (ii) 
and (iii). 
‘‘(ii) FEES TO BE PAID IN FULL.—All 
fees due the Secretary with respect to a 
guaranteed loan shall be paid in full before 
any sale. 
‘‘(iii) LOAN
TO
BE
FULLY
DIS-
BURSED.—The loan shall be fully dis-
bursed to the borrower before the sale. 
‘‘(B) POST-SALE.—After a loan is sold in 
the secondary market, the lender shall— 
‘‘(i) remain obligated under the guar-
antee agreement of the lender with the 
Secretary; and 
‘‘(ii) continue to service the loan in 
accordance with the terms and conditions 
of that agreement. 
‘‘(C) PROCEDURES.—The Secretary shall 
develop such procedures as are necessary for— 
‘‘(i) the facilitation, administration, 
and promotion of secondary market oper-
ations; and 
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‘‘(ii) determining the increase of ac-
cess of farmers to capital at reasonable 
rates and terms as a result of secondary 
market operations. 
‘‘(D) RIGHTS
TO
PREPAY.—This sub-
section does not impede or extinguish— 
‘‘(i) the right of the borrower or the 
successor in interest to the borrower to 
prepay (in whole or in part) any loan made 
under this title; or 
‘‘(ii) the rights of any party under any 
provision of this title. 
‘‘(2) ISSUE POOL CERTIFICATES.— 
‘‘(A) IN
GENERAL.—The Secretary may, 
directly or through a market maker approved 
by the Secretary, issue pool certificates rep-
resenting ownership of part or all of the guar-
anteed portion of any loan guaranteed by the 
Secretary under this title. 
‘‘(B) APPROVAL.—Certificates under sub-
paragraph (A) shall be based on and backed by 
a pool established or approved by the Secretary 
and composed solely of the entire guaranteed 
portion of the loans. 
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‘‘(C) GUARANTEE
OF
POOL.—On such 
terms and conditions as the Secretary considers 
appropriate, the Secretary may guarantee the 
timely payment of the principal and interest on 
pool certificates issued on behalf of the Sec-
retary by approved market makers for purposes 
of this subsection. 
‘‘(D) LIMITATIONS.—A guarantee under 
subparagraph (C) shall be limited to the extent 
of principal and interest on the guaranteed por-
tions of loans that compose the pool. 
‘‘(E) PREPAYMENT.—If a loan in a pool is 
prepaid, either voluntarily or by reason of de-
fault, the guarantee of timely payment of prin-
cipal and interest on the pool certificates shall 
be reduced in proportion to the amount of prin-
cipal and interest that the prepaid loan rep-
resents in the pool. 
‘‘(F) INTEREST
ACCRUAL.—Interest on 
prepaid or defaulted loans shall accrue and be 
guaranteed by the Secretary only through the 
date of payment on the guarantee. 
‘‘(G) REDEMPTION.—During the term of 
the pool certificate, the certificate may be called 
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for redemption due to prepayment or default of 
all loans constituting the pool. 
‘‘(H) FULL FAITH AND CREDIT.—The full 
faith and credit of the United States is pledged 
to the payment of all amounts that may be re-
quired to be paid under any guarantee of the 
pool certificates issued by approved market 
makers under this subsection. 
‘‘(I) FEES.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall not collect any fee for any guarantee 
under this subsection. 
‘‘(ii) 
SECRETARIAL
FUNCTIONS.— 
Clause (i) does not preclude the Secretary 
from collecting a fee for the functions de-
scribed in paragraph (3). 
‘‘(J) DEFAULT.—Not later than 30 days 
after a borrower of a guaranteed loan is in de-
fault of any principal or interest payment due 
for 60 days or more, the Secretary shall— 
‘‘(i) purchase the pool certificates rep-
resenting ownership of the guaranteed por-
tion of the loan; and 
‘‘(ii) pay the registered holder of the 
certificates an amount equal to the guaran-
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