Farm loan programs are being updated as part of the U.S. Department of Agriculture’s (USDA) efforts to provide more equitable services. The changes are designed to better support current borrowers, with an emphasis on historically underserved farmers. Farm loans are critical for producers in providing access to the necessary capital to run a farming operation.
“USDA remains committed to examining barriers faced by all borrowers, especially those in economic distress, new and beginning, socially disadvantaged or otherwise underserved producers,” Administrator of USDA’s Farm Service Agency (FSA), Zach Ducheneaux said in a press release. “We recognize loan making and servicing activities are critical for producers, especially in tough times. This improvement to our farm loan programs recognizes the needs of producers and more importantly enacts equitable relief provisions to ensure they get a fair shake.”
Requirements for Direct Farm Ownership loans have been adjusted, with allowing additional items to be included with the existing three-year farming experience requirements. The definition of veteran farmers is being expanded, along with the provision of additional benefits. Eligible issues along with individuals covered by the agricultural Certified Mediation Program has also been expanded. The changes also allow borrowers who received restructuring with a write down to maintain eligibility for an Emergency loan. Beginning and socially disadvantaged farmers will be able to receive a guarantee equal to 95 percent, over the otherwise applicable 90 percent guarantee.
FSA was authorized through the 2018 Farm Bill to provide a degree of relief to specific direct loan borrowers. The additional flexibilities will allow for better assistance for borrows that previously may have been required to immediately repay loans or convert it to more burdensome non-program loans. USDA encourages farmers and ranchers to learn more about the assistance available through farm loan programs by connecting with their local loan officials.