 "FSA targets a portion of its loan funds each year to socially
disadvantaged farmers and ranchers," said Scherrie V. Giamanco,
state executive director. "Farming and ranching is a
capital-intensive business, and FSA is committed to helping
producers start and maintain their agricultural operations."In
fiscal 2011, Illinois FSA obligated $2,396,000 in direct and
guaranteed loans to socially disadvantaged producers.
USDA defines socially disadvantaged applicants as a group whose
members have been subjected to racial, ethnic or gender prejudice
because of their identity as members of the group without regard to
their individual qualities. For farm loan program purposes, SDA
groups are women, African-Americans, American Indians, Alaskan
Natives, Hispanics, Asians and Pacific Islanders.
SDA producers who cannot obtain commercial credit from a bank can
apply for either FSA direct loans or guaranteed loans. Direct loans
are made to applicants by FSA. Guaranteed loans are made by lending
institutions that arrange for FSA to guarantee the loan. FSA can
guarantee up to 95 percent of the loss of principal and interest on
a loan. The FSA guarantee allows lenders to make agricultural credit
available to producers who do not meet the lender's normal
underwriting criteria.
The direct and guaranteed loan program offers two types of loans:
farm ownership loans and farm operating loans.
Farm ownership loan funds may be used to purchase or enlarge a
farm or ranch, purchase easements or rights of way needed in the
farm's operation, build or improve buildings such as a dwelling or
barn, promote soil and water conservation and development, and pay
closing costs.
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 Farm operating loan funds may be used to purchase livestock,
poultry, farm equipment, fertilizer and other materials necessary to
operate a successful farm. Operating loan funds can also be used for
family living expenses, refinancing debts under certain conditions,
paying salaries for hired farm laborers, installing or improving
water systems for home, livestock or irrigation use, and other
similar improvements.
Repayment terms for direct operating loans depend on the
collateral securing the loan and usually run from one to seven
years. Financing for direct farm ownership loans cannot exceed 40
years. Interest rates for direct loans are set periodically
according to the government's cost of borrowing. Guaranteed loan
terms and interest rates are set by the lender.
For more information on FSA's farm loan programs, contact your
local county office. For contact information for the Logan County Farm Service Agency,
click here.
[Text from file
received from Illinois Farm
Service Agency]
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