FEDERAL LAND BANK LOAN SECURITY.

SEC. 426. FEDERAL LAND BANK LOAN SECURITY. Section 1.9 (12 U.S.C. 2017) is amended to read as follows: “SEC. 1.9. FEDERAL LAND BANK LOAN SECURITY. “(a) Maximum Level of Loans.— “(1) In general.— Loans originated by a Federal land bank, or in which a Federal land bank participates in with a lender that is not a System institution, shall not exceed 85 percent of the appraised value of the real estate security, except as provided for in paragraphs (2) and (3). “(2) Regulation.— The Farm Credit Administration may, by regulation, require that loans not exceed 75 percent of the appraised value of the real estate security. “(3) Guaranteed loans.— If the loan is guaranteed by Federal, State, or other governmental agencies, the loan may not exceed 97 percent of the appraised value of the real estate security, as may be authorized under regulations of the Farm Credit Administration. “(b) Security.— All loans originated or participated in by a bank under this section shall be secured by first liens on interests in real estate of such classes as may be approved by the Farm Credit Administration. “(c) Value of Security.— To adequately secure the loan, the value of security shall be determined by appraisal under appraisal standards prescribed by the bank and approved by the Farm Credit Administration. “(d) Additional Security.— Additional security for any loan may be required by the bank to supplement real estate security. Credit factors, other than the ratio between the amount of the loan and the security value, shall be given due consideration. “(e) Financial Statement.— Each Federal land bank shall require a financial statement from each borrower at least once every 3 years, or during such shorter period of time as may be required under regulations of the Farm Credit Administration.”.