PUBLIC LAW 102-554—OCT. 28, 1992 106 STAT. 4149

the credit needs of the operation (as specified in the
plan contained in the application) a guarantee under
section 309(h) for the repayment of 90 percent of the
loan principal and interest and an interest subsidy
payment in Hie amount necessary to ensure that the
applicant qualifies for such a loan but not more than
the amount of interest assistance allowed by section
351; or

"(II) if during any of the first 4 years for which
assistance is provided under this section the Secretary
determines that the applicant will not qualify for a
loan described in subclause (I), an interest subsidy
payment sufficient to ensure that the effective rate
of interest payable by the applicant on the loan equals
the rate of interest charged to low income, limited
resource borrowers on insured operating loans made
under this subtitle that are of comparable size and
maturity; or

"(iii) to make an insured loan under this subtitle
to the applicant, in the amount specified in the plan
contained in the application, at an interest rate that
is no higher than the interest rate charged to regular
borrowers and no lower than the interest rate charged
to low income, limited resource borrowers under this
subtitle.

"(3) LOANS OR GUARANTEES FOR NEW OR IMPROVED EQUIP-
MENT.—The Secretary shall make a commitment to any
applicant whose application is approved under subsection (d)
to provide the applicant with loans under this subtitle or loan
guarantees under section 309(h) to finance the acquisition,
improvement, or repair of equipment needed hi the operation
described in the application if the plan contained in the applica-
tion provides for the commitment, to the extent that the
applicant is unable to obtain sufficient credit from commercial
or cooperative lenders for such purposes at reasonable rates
and terms (taking into consideration prevailing private and
cooperative rates and terms in the community in which the
operation is, or is to be, located, for loans for similar purposes
and periods of time).

*(4) PRIORITY IN PURCHASE OF INVENTORY EQUIPMENT;
LOANS OR GUARANTEES FOR THE PURCHASES IN CERTAIN CASES.—
During the commitment period, the Secretary shall—

"(A) accord the applicant whose application is approved
under subsection (d) priority for the purchase of equipment
in the inventory of the Farmers Home Administration nec-
essary for the success of the operation described in the
application; and

"(B) provide the applicant with loans under this sub-
title or loan guarantees under section 309(h) to finance
the purchases if the plan contained in the application pro-
vides for the assistance, to the extent that the applicant
is unable to obtain sufficient credit from commercial or
cooperative lenders for such purpose at reasonable rates
and terms (taking into consideration prevailing private and
cooperative rates, and terms in the community in which
the operation is, or is to be, located, for loans for similar
purposes and periods of time).