The United States Department of Agriculture announced changes to the Farm Service Agency’s (FSA) Farm Loan Program that are intended to help producers.
Secretary of Agriculture Tom Vilsack said, “Our nation’s farmers and ranchers are the engine of the rural economy. These improvements to our Farm Loan Program will help a new generation begin farming and grow existing farm operations.”
According to USDA the changes will expand lending opportunities to producers to begin and continue operations, including greater flexibility in determining eligibility, raising loan limits, and emphasizing beginning and socially disadvantaged producers.
Immediate changes include:
- Elimination of loan term limits for guaranteed operating loans.
- Modification of the definition of beginning farmer, using the average farm size for the county as a qualifier instead of the median farm size.
- Modification of the Joint Financing Direct Farm Ownership Interest Rate to 2 percent less than regular Direct Farm Ownership rate, with a floor of 2.5 percent. Previously, the rate was established at 5 percent.
- Increase of the maximum loan amount for Direct Farm Ownership down payments from $225,000 to $300,000.
- Elimination of rural residency requirement for Youth Loans, allowing urban youth to benefit.
- Debt forgiveness on Youth Loans, which will not prevent borrowers from obtaining additional loans from the federal government.
- Increase of the guarantee amount on Conservation Loans from 75 to 80 percent and 90 percent for socially disadvantaged borrowers and beginning farmers.
- Microloans will not count toward loan term limits for veterans and beginning farmers.
The changes were made possible as a result of the 2014 Farm Bill.