To amend the Consolidated Farm and Rural Development Act to require borrower good faith with respect to Farmers Home Administration loans; to improve the management of such delinquent loans, including limiting the write-down of such loans, and for other purposes.

Amends the Consolidated Farm and Rural Development Act to direct the Secretary of Agriculture to sell Farmers Home Administration (FmHA) inventory land to: (1) preference purchasers at a price not greater than its appraised market value; and (2) nonpreference purchasers at a price not greater than its market value as determined by bids after advertising or by negotiated sale. Repeals the provision requiring sale at a price based on the land's average annual income.

Requires borrower-owner good faith for FmHA loan termination or purchase preference eligibility.

Provides for the inclusion of a property's value in calculating the securing collateral's recovery value if the Secretary determines that the property's value should be included in such calculation.

Authorizes the Secretary, in calculating a restructured loan's value, to consider all of a borrower's assets, except for essential living and farm operating expenses.

Limits the net recovery buy-out option with respect to certain farmer program loans to good faith borrowers. Permits one buy-out or write-down per borrower. Extends the net recovery buy-out option period to 90 days. Extends the recapture provision of a buy-out agreement to ten years. Limits maximum recapture to the difference between the recovery value and the loan's outstanding principal and interest. (Current law limits such amount to the difference between recovery value and the loan's fair market value.)

Limits maximum write-down of the principal or interest on such loans to $250,000 per borrower.

Limits the use of write-down or buy-out options to loans made or insured before January 6, 1988.

Extends restructuring deadlines for: (1) application filings to 60 days; and (2) application processing by the Secretary to 90 days.