The U.S. Department of Agriculture (USDA) has developed a new program to help heirs resolve land ownership and succession issues. The new Heirs’ Property Relending Program (HPRP) was announced during a recent press conference on July 29. USDA is making $67 million available for competitive loans through the program. Beginning in August, intermediary lenders will be allowed to apply for loans up to $5 million at one percent interest. The provisions of the program have been made possible through the 2018 Farm Bill.
“While those affected are in all geographic and cultural areas, many Black farmers and other groups who have experienced historic discrimination have inherited heirs’ property,” Agriculture Secretary Tom Vilsack said in a press release. “USDA is committed to revising policies to be more equitable and examining barriers faced by heirs’ property owners is part of that effort. This helps ensure that we protect the legacy of these family farms for generations to come.”
The HPRP will provide funding through intermediary lenders such as cooperatives, credit unions, and nonprofit organizations to enable landowners to resolve ownership and succession issues. Heirs will have the ability to use the loan funding to help resolve title issues through the purchasing or consolidation of property interests. Loans can also be applied to the financial costs associated with a succession plan. Heirs are prohibited from using loan funds to make improvements to the land, or for payments of operating costs or finders’ fees. Property issues have been a longstanding challenge for many agricultural producers and landowners
Intermediate lenders will need to be certified as a community development financial institution to be eligible for the program. Lenders must also have the experience and capability necessary for servicing agricultural and commercial loans. The determination of rates, terms, and payment structures for the loans to heirs will be determined by selected lenders.