Purchase of farms and farm equipment

§ 1812. Purchase of farms and farm equipment (a) Any loan to a veteran, if made pursuant to the provisions of this chapter, is automatically guaranteed if such loan is for one or more of the following purposes: (1) To purchase any lands, buildings, livestock, equipment, machinery, supplies or implements, or to repair, alter, construct, or improve any land, equipment, or building, including a farmhouse, to be used in farming operations conducted by the veteran involving production in excess of his own needs. (2) For working capital requirements necessary for such farming operations. (3) To purchase stock in a cooperative association where the purchase of such stock is required by Federal law as an incident to obtaining the loan. (b) No loan may be guaranteed under this section unless— (1) the proceeds of the loan will be used for one of the purposes listed in subsection (a) in connection with bona fide farming operations conducted by the veteran; (2) such property will be useful in and reasonably necessary for efficiently conducting such operations; (3) the ability and experience of the veteran, and the nature of the proposed farming operations to be conducted by him, are such that there is a reasonable likelihood that such operations will be successful; and 72 Stat. 1211 (4) the price paid or to be paid by the veteran for such property, or for the cost of construction, repairs, or alterations, does not exceed the reasonable value thereof as determined by the Administrator. (c) For the purpose of encouraging the construction and improvement of farm housing, the Administrator may guarantee a loan for the construction or improvement of a farmhouse which loan is secured by a first lien on a portion of the farm suitable in size and location as an independent home site, and may permit payment out of the proceeds of such loan any sum required to obtain the release of such site from existing indebtedness. The Administrator may, in his discretion, except any loan for the construction or improvement of a farmhouse from the first lien requirement imposed by section 1803 (d)(3) of this title.