(1) Direct loans A farmer or rancher may use a direct loan made under this subchapter only for
(A) acquiring or enlarging a farm or ranch;
(B) making capital improvements to a farm or ranch;
(C) paying loan closing costs related to acquiring, enlarging, or improving a farm or ranch;
(D) paying for activities to promote soil and water conservation and protection described in section
1924 of this title on a farm or ranch; or
(E) refinancing a temporary bridge loan made by a commercial or cooperative lender to a farmer or rancher for the acquisition of land for a farm or ranch, if
(i) the Secretary approved an application for a direct farm ownership loan to the farmer or rancher for acquisition of the land; and
(ii) funds for direct farm ownership loans under section
1994 (b) of this title were not available at the time at which the application was approved.
(2) Guaranteed loans A farmer or rancher may use a loan guaranteed under this subchapter only for
(A) acquiring or enlarging a farm or ranch;
(B) making capital improvements to a farm or ranch;
(C) paying loan closing costs related to acquiring, enlarging, or improving a farm or ranch;
(D) paying for activities to promote soil and water conservation and protection described in section
1924 of this title on a farm or ranch; or
(E) refinancing indebtedness.