General appraisal requirements

(a) Establishing value for real estate. The value of real estate will be established by a real estate appraisal or real estate evaluation completed in accordance with § 761.7 of this chapter.

(b) Establishing value for personal property. The value of personal property will be established as follows:

(1) Annual production. Except for loan transactions approved through AFT, the security value of annual livestock and crop production is presumed to be 100 percent of the amount loaned for annual operating and family living expenses, as outlined in the approved farm operating plan.

(2) Annual production for AFT. The security value of annual livestock and crop production for loan transactions approved through AFT is not presumed to be 100 percent of the amount loaned for annual operating and family living expenses. The amount of an annual operating loan approved through AFT will not exceed the lesser of:

(i) 75 percent of the Gross Income reported on Schedule F (or equivalent descriptions from farm income in entity tax returns) for the most recent available tax return; or

(ii) The total gross farm income, which for purposes of this paragraph means all production and income excluding non-farm income in the cash flow projection, submitted by the applicant with the loan application.

(3) Livestock and equipment. The value of livestock and equipment will be established by an appraisal completed in accordance with § 761.7 of this chapter.

[91 FR 56755, Sept. 4, 2026]