((a)) ** Definitions** As used in this section:
((1)) The term “Administrator” means the Administrator of the Small Business Administration.
((2)) The term “borrower-owner” means—
((A)) a borrower of a loan made or insured by the Secretary or the Administrator who meets the eligibility requirements of subsection (c)(1); or
((B)) in any case in which an owner of homestead property pledged the property to secure the loan and the owner is different than the borrower, the owner.
((3)) The term “farm program loan” means any loan made by the Administrator under the Small Business Act ( et seq.) for any of the purposes authorized for loans under subchapters I or II.
((4)) The term “homestead property” means the principal residence and adjoining property possessed and occupied by a borrower-owner specified in paragraph (2) of this subsection, including a reasonable number of farm outbuildings located on the adjoining land that are useful to the occupants of the homestead, and no more than 10 acres of adjoining land that is used to maintain the family of the individual.
((5)) The term “Secretary” means the Secretary of Agriculture.
((b)) ** Occupancy of homestead upon foreclosure, bankruptcy, or liquidation; appraisal; period of occupancy**
((1)) The Secretary or the Administrator shall, on application by a borrower-owner who meets the eligibility requirements of subsection (c)(1), permit the borrower-owner to retain possession and occupancy of homestead property under the terms set forth, and until the action described in this section has been completed, if—
((A)) the Secretary forecloses, holds in inventory on , or takes into inventory, property securing a loan made or insured under this chapter;
((B)) the Administrator forecloses, holds in inventory on , or takes into inventory, property securing a farm program loan made under the Small Business Act ( et seq.); or
((C)) the borrower-owner of a loan made or insured by the Secretary or the Administrator files a petition in bankruptcy that results in the conveyance of the homestead property to the Secretary or the Administrator, or agrees to voluntarily liquidate or convey such property in whole or in part.
((2)) The value of the homestead property shall be determined insofar as possible by an independent appraisal made within six months from the date of the borrower-owner’s application to retain possession and occupancy of the homestead property.
((3)) The period of occupancy of homestead property under this subsection may not exceed five years, but in no case shall the Secretary or the Administrator grant a period of occupancy less than three years, subject to compliance with the requirements of subsection (c).
((c)) ** Terms and conditions**
((1)) To be eligible to occupy homestead property, a borrower-owner of a loan made or insured by the Secretary or the Administrator shall—
((A)) apply for such occupancy not later than 30 days after the property is acquired by the Secretary or Administrator, or for property in inventory on , the borrower-owner shall apply for occupancy not later than 30 days after ;
((B)) have received from farming or ranching operations gross farm income reasonably commensurate with—
((i)) the size and location of the farming unit of the borrower-owner; and
((ii)) local agricultural conditions (including natural and economic conditions), in at least 2 calendar years during the 6-year period preceding the calendar year in which the application is made;
((C)) have received from farming or ranching operations at least 60 percent of the gross annual income of the borrower-owner and any spouse of the borrower-owner in at least 2 calendar years during any 6-year period described in subparagraph (B);
((D)) have continuously occupied the homestead property during the 6-year period described in subparagraph (B), except that such requirement may be waived if a borrower-owner has, due to circumstances beyond the control of the borrower-owner, had to leave the homestead property for a period of time not to exceed 12 months during the 6-year period;
((E)) during the period of the occupancy of the homestead property, pay a reasonable sum as rent for such property to the Secretary or the Administrator in an amount substantially equivalent to rents charged for similar residential properties in the area in which the homestead property is located;
((F)) during the period of the occupancy of the homestead property, maintain the property in good condition; and
((G)) meet such other reasonable and necessary terms and conditions as the Secretary may require consistent with this section.
((2)) For purposes of subparagraphs (B) and (C) of paragraph (1), the term “farming or ranching operations” shall include rent paid by lessees of agricultural land during any period in which the borrower-owner, due to circumstances beyond the control of the borrower-owner, is unable to actively farm such land.
((3)) For the purposes of paragraph (1)(E), the failure of the borrower-owner to make timely rental payments shall constitute cause for the termination of all rights of such borrower-owner to possession and occupancy of the homestead property under this section. In effecting any such termination, the Secretary shall afford the borrower-owner or lessee the notice and hearing procedural rights described in section 1983b of this title and shall comply with all applicable State and local laws governing eviction from residential property.
((4))
((A)) The period of occupancy allowed the prior owner of homestead property under this section shall be the period requested in writing by the prior owner, except that such period shall not exceed 5 years.
((B)) At any time during the period of occupancy of a borrower-owner who is a socially disadvantaged farmer or rancher (as defined in ), the borrower-owner or a member of the immediate family of the borrower-owner shall have a right of first refusal to reacquire the homestead property on such terms and conditions as the Secretary shall determine, except that the Secretary may not demand a payment for the homestead property that is in excess of the current market value of the homestead property as established by an independent appraisal. The independent appraisal shall be conducted by an appraiser selected by the borrower-owner or immediate family member, as the case may be, from a list of three appraisers approved by the county supervisor.
((5)) No rights of a borrower-owner under this section, and no agreement entered into between the borrower-owner and the Secretary for occupancy of the homestead property, shall be transferable or assignable by the borrower-owner or by operation of any law, except that in the case of death or incompetency of such borrower-owner, such rights and agreements shall be transferable to the spouse of the borrower-owner if the spouse agrees to comply with the terms and conditions thereof.
((6)) Not later than the date of acquisition of the property securing a loan made under this chapter (or, in the case of real property in inventory on , not later than 5 days after ), the Secretary shall notify the borrower-owner from whom the property was acquired of the availability of homestead protection rights under this section.
((d)) ** First right of refusal of reacquisition** At the end of the period of occupancy described in subsection (c), the Secretary or the Administrator shall grant to the borrower-owner a first right of refusal to reacquire the homestead property on such terms and conditions (which may include payment of principal in installments) as the Secretary or the Administrator shall determine. Such terms and conditions shall not be less favorable than those intended to be offered to any other buyer.
((e)) ** Value as measure of reacquisition payment of principal** At the time any reacquisition agreement is entered into, the Secretary or the Administrator may not demand a total payment of principal that is in excess of the value of the homestead property as established under subsection (b)(2).
((f)) ** Contract authority** The Secretary may enter into contracts authorized by this section before the Secretary acquires title to the homestead property.
((g)) ** Conflict between Federal and State law** In the event of any conflict between this section and any provision of the law of any State relating to the right of a borrower-owner to designate for separate sale or redeem part or all of the real property securing a loan foreclosed on by the lender thereof, such provision of State law shall prevail.