USDA Loan Modernization Act

The USDA Loan Modernization Act (HR 6779) updates eligibility rules for USDA farm loan programs by lowering ownership thresholds from "majority" to "at least 50 percent" for real estate, operating, and emergency loans. It introduces new categories like "qualified operators" and allows farm businesses with complex ownership structures (e.g., 75% owned by qualified operators) to qualify. This directly affects farmers and farm entities applying for these loans, particularly those with partial ownership stakes or embedded entity structures. The bill modifies existing provisions under the Consolidated Farm and Rural Development Act without creating new loan programs or changing loan terms.