A bill to amend the Consolidated Farm and Rural Development Act to improve the administration of Farmers Home Administration loans, and for other purposes.

Amends provisions of the Consolidated Farm and Rural Development Act concerning debt settlement and loan servicing with respect to Farmers Home Administration (FmHA) loans. Directs the Secretary of Agriculture (Secretary), before taking action on such loans, to calculate the value that the Federal Government could expect to realize through either liquidation of the property securing the loan or a bankruptcy proceeding. Prohibits the Secretary from requiring: (1) liquidation as a condition of entering a settlement if, through settlement, the Secretary will realize at least the value as calculated above; or (2) that the amount outstanding on a loan be due and payable as a condition of settlement.

Directs the Secretary to write down to its current market value the outstanding debt on a delinquent loan in cases where the above calculation indicates that the Secretary could expect to receive less than the outstanding amount.

Empowers the Secretary to pursue for collection all claims against third parties assigned to the Secretary.

Directs the Secretary to provide written notice of the calculation process and its practical application to any delinquent borrower, as well as any borrower who requests such notice or who holds a loan that the Secretary intends to liquidate, accelerate, or foreclose upon.

Permits appeals of denials of settlement or of loan servicing. Authorizes the Secretary to allow deferral of principal and interest on outstanding loans or to forego foreclosure upon his or her own initiative. (Under current law a borrower must request such actions.) Requires (current law permits) the Secretary to permit interest that accrues during the loan deferral period to bear no interest. Sets forth considerations and conditions that the Secretary must implement in determining whether a borrower is eligible for a deferral, and in establishing the deferral period. Permits retroactive restructuring of loans.

Directs the Secretary to provide to each borrower or loan applicant, at specified times, written notice describing: (1) the loan servicing alternative available, including deferral, rescheduling, reamortization, consolidation, limited resource rates, and debt settlement; and (2) the means of applying for each.

Directs the Secretary to consider a borrower or applicant for loan servicing alternatives when a borrower: (1) so requests; (2) becomes delinquent in repayments; or (3) before initiation of liquidation, requests acceleration, foreclosure, or other collection activity.

Revises provisions relating to membership on county committees and elections of committee members.

Revises procedures applicable to hearings provided to persons appealing loan decisions of the Secretary, and brings such hearings within the framework of the Administrative Procedure Act.

Requires the Secretary to participate in any program of credit dispute resolution required under State law before initiating collection activity.

Directs the Secretary to permit a borrower to redeem any loan-securing real property the Secretary has acquired through foreclosure or other legal process during the year following the date of judgment or the period prescribed under State law, whichever is longer. Applies State law to the redemption process. Fixes priorities as to borrower preference for redemption purchases.

Revises farmland disposition provisions to give previous owners or operators the right of first refusal with respect to a lease of the property and preference with respect to the awarding of management contracts governing the property. Authorizes the Secretary to sign a contract to lease land to its owner before the Secretary actually acquires the property. Requires that previous owners be given written notice of the potential sale or lease of property. Applies appeals procedures to denials of applications or disputes with respect to leases or purchase agreements.

Directs the Secretary to release from the sale of any loan-securing property an amount sufficient to assure the borrower's family a reasonable standard of living and to pay all necessary farm operating expenses.

Revises homestead provisions to: (1) include outbuildings in homestead property; and (2) permit a borrower to retain possession and occupancy of homestead property in certain cases. Sets forth conditions to govern such retention of homestead property.

Establishes in each State a State Farmers Home Administration Policy Board to: (1) review and report on State impact on Federal policies of the FmHA: (2) determine loan amounts needed in the State; and (3) present quarterly reports to the Secretary and to the public on its activities.