Down payment loan funds may be used to partially finance the purchase of a family farm by an eligible beginning farmer, socially disadvantaged farmer, or veteran farmer farmer.

The applicant must:

(a) Comply with the general eligibility requirements established at § 764.101 and the FO eligibility requirements of § 764.152; and

(b) Be a beginning farmer, socially disadvantaged farmer, or veteran farmer.

(a) The applicant must:

(1) Comply with the general limitations established at § 764.102; and

(2) Provide a minimum down payment of 5 percent of the purchase price of the farm.

(b) Down payment loans will not exceed 45 percent of the lesser of:

(1) The purchase price,

(2) The appraised value of the farm to be acquired, or

(3) $667,000; subject to the direct FO dollar limit specified in 7 CFR 761.8(a)(1)(i).

(c) Down payment loans made as an ML for FO purposes may not exceed $50,000.

(d) Financing provided by the Agency and all other creditors must not exceed 95 percent of the purchase price. Financing provided by eligible lenders may be guaranteed by the Agency under part 762 of this chapter.

(a) Rates. The interest rate for Down payment loans will be the regular direct FO rate minus 4 percent, but in no case less than 1.5 percent.

(b) Terms. (1) The Agency schedules repayment of Down payment loans in equal, annual installments over a term not to exceed 20 years.

(2) The non-Agency financing must have an amortization period of at least 30 years and cannot have a balloon payment due within the first 20 years of the loan.

A Down payment loan must:

(a) Be secured in accordance with §§ 764.103 through 764.106;

(b) Be secured by a lien on the property being acquired with the loan funds and junior only to the party financing the balance of the purchase price.