US Code

Public Law 119-73 (01/23/2026)

7 U.S.C. § 2000

Homestead protection

(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)
15 U.S.C. 6311
1 So in original. Probably should be “subchapter”.
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)
15 U.S.C. 631 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)
2
2 See References in Text note below.
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)
section 2003(e)(2) of this title 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.

Pub. L. 87–128, title III, § 352Pub. L. 99–198, title XIII, § 132199 Stat. 1532Pub. L. 100–233, title VI, § 614101 Stat. 1675Pub. L. 102–237, title V, § 501(g)105 Stat. 1867Pub. L. 102–552, title V, § 516(i)106 Stat. 4138Pub. L. 104–127, title VI, § 644110 Stat. 1103Pub. L. 110–234, title V, § 5305122 Stat. 1153Pub. L. 110–246, § 4(a)122 Stat. 1664(, as added , , ; amended , , ; , title VII, § 701(h)(2), , , 1880; , (j)(1), , ; , , ; , , ; , title V, § 5305, , , 1915.)

Editorial Notes

References in Text

Pub. L. 85–536, § 272 Stat. 384section 631 of Title 15The Small Business Act, referred to in subsecs. (a)(3) and (b)(1)(B), is (1 et seq.), , , which is classified generally to chapter 14A (§ 631 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

Pub. L. 87–12875 Stat. 307section 1921 of this titleThis chapter, referred to in subsecs. (b)(1)(A) and (c)(6), was in the original “this title”, meaning title III of , , , known as the Consolidated Farm and Rural Development Act, which is classified principally to this chapter. For complete classification of title III to the Code, see Short Title note set out under and Tables.

Section 1983b of this titlePub. L. 103–354, title II, § 281(c)108 Stat. 3233, referred to in subsec. (c)(3), was repealed by , , .

Codification

Pub. L. 110–234Pub. L. 110–246Pub. L. 110–234section 4(a) of Pub. L. 110–246 and made identical amendments to this section. The amendments by were repealed by .

Amendments

Pub. L. 110–246, § 5305section 2003(e)(2) of this title2008—Subsec. (c)(4)(B). , substituted “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” for “period of occupancy, the borrower-owner” and inserted “or immediate family member, as the case may be,” after “selected by the borrower-owner”.

Pub. L. 104–127, § 644(1)1996—Subsec. (c)(1)(A). , substituted “30” for “90” in two places.

Pub. L. 104–127, § 644(2)Subsec. (c)(6). , substituted “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 ),” for “Within 30 days of the acquisition of the homestead property securing a loan made or insured under this chapter,” and struck out at end “For property in inventory on , the Secretary shall make a good faith effort to notify the borrower-owner of the availability of homestead protection rights under this section within 60 days after .”

Pub. L. 102–552, § 516(i)1992—Subsec. (a)(4), (5). , redesignated par. (4), defining “Secretary”, as (5).

Pub. L. 102–552, § 516(j)(1)Subsec. (b)(2). , substituted “borrower-owner’s” for “borrower’s”.

Pub. L. 102–237, § 501(g)1991—Subsec. (a)(2) to (4). , added par. (2), redesignated former pars. (2) and (3) as (3) and (4), respectively, and substituted “borrower-owner” for “borrower” in redesignated par. (4).

Pub. L. 102–237, § 501(g)(2)Subsec. (b)(1). , substituted “borrower-owner” for “borrower” wherever appearing.

Pub. L. 102–237, § 701(h)(2)Subsec. (b)(3). , struck out “be” after “shall”.

Pub. L. 102–237, § 501(g)(2)Subsecs. (c), (d), (g). , substituted “borrower-owner” for “borrower” wherever appearing.

Pub. L. 100–233, § 614(1)1988—Subsec. (a)(3). , inserted “, 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”.

Pub. L. 100–233, § 614(2)15 U.S.C. 631Subsec. (b)(1). , added par. (1) and struck out former par. (1) which read as follows: “If the Secretary forecloses a loan made or insured under this chapter, the Administrator forecloses a farm program loan made under the Small Business Act ( et seq.), or a borrower of a loan made or insured by either agency declares bankruptcy or goes into voluntary liquidation to avoid foreclosure or bankruptcy, the Secretary or Administrator may upon application by the borrower, permit the borrower to retain possession and occupancy of any principal residence of the borrower, and a reasonable amount of adjoining land for the purpose of family maintenance.”

Pub. L. 100–233, § 614(3)Subsec. (c). , completely revised and restated subsec. (c), substituting pars. (1) to (6) for former pars. (1) to (8).

Pub. L. 100–233, § 614(3)Subsec. (d). , inserted at end “Such terms and conditions shall not be less favorable than those intended to be offered to any other buyer.”

Pub. L. 100–233, § 614(4)Subsecs. (f), (g). , added subsecs. (f) and (g).

Statutory Notes and Related Subsidiaries

Effective Date of 2008 Amendment

Pub. L. 110–234Pub. L. 110–246Pub. L. 110–234section 4 of Pub. L. 110–246section 8701 of this titleAmendment of this section and repeal of by effective , the date of enactment of , see , set out as an Effective Date note under .

Effective Date of 1996 Amendment

Pub. L. 104–127Pub. L. 104–127section 1922 of this titleAmendment by effective , but not applicable with respect to complete application to acquire inventory property submitted prior to , see section 663(a), (c) of , set out as a note under .

Effective Date of 1992 Amendment

Pub. L. 102–552, title V, § 516(j)(2)106 Stat. 4138

Public Law 102–237105 Stat. 1867section 1985 of this title“The amendment made by paragraph (1) of this subsection [amending this section] shall take effect at the same time as the amendments made by section 501(f) of the Food, Agriculture, Conservation, and Trade Act Amendments of 1991 (; ) [amending ] took effect.”
, , , provided that:

Effective Date of 1991 Amendment

section 701(h)(2) of Pub. L. 102–237section 1101(c) of Pub. L. 102–237section 1421 of this titleAmendment by to any provision specified therein effective as if included in act that added provision so specified at the time such act became law, see , set out as a note under .