Loans available for socially disadvantaged farmers and ranchers

[February 02, 2012]  SPRINGFIELD -- Scherrie Giamanco, state executive director for USDA's Illinois Farm Service Agency, announced Wednesday that the USDA Farm Service Agency reserves funds each year to make loans to socially disadvantaged applicants to buy and operate family-size farms. A socially disadvantaged farmer is one of 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 the purposes of this program, socially disadvantaged groups have been listed as women, African-Americans, American Indians, Alaskan Natives, Hispanics, Asians and Native Hawaiians or other Pacific Islanders.

Types of loans

Operating loans may be used for various short-term and intermediate-type credit needs, such as the purchase of livestock and equipment and annual operating expenses. Farm ownership loans may be used for the purchase or improvement of farm or ranch real estate and buildings associated with these properties.

Who may borrow

Individuals, partnerships, joint operations, corporations, limited liability companies and cooperatives primarily and directly engaged in family-size farming operations may apply.

Terms and interest rates

Repayment terms for direct operating loans depend on the collateral securing the loan and usually run from one to seven years. Repayment terms on direct farm ownership loans are up to 40 years. Guaranteed loan terms (made through commercial lenders, i.e., banks) are set by the lender.

Interest rates

Current interest rates are:

• Operating loans: 1.375 percent

• Farm ownership loans: 3.375 percent

• Emergency loans: 3.750 percent

How to apply for a loan

Applications for all FSA direct loan programs are made through the local FSA county office. Guaranteed loan applications are processed by the participating lender.

[Text from file received from the Illinois Farm Service Agency]