|
 The
U.S. Department of Agriculture (USDA) announces changes to the
Farm Service Agency’s (FSA) Farm Loan Programs, effective Sept.
25, 2024 — changes that are intended to increase opportunities
for farmers and ranchers to be financially viable. These
improvements, part of the Enhancing Program Access and Delivery
for Farm Loans rule, demonstrate USDA’s commitment to improving
farm profitability through farm loans designed to provide
important financing options used by producers to cover operating
expenses and purchase land and equipment.
Farm loan policy changes outlined in the Enhancing Program
Access and Delivery for Farm Loans rule, are designed to better
assist borrowers to make strategic investments in the
enhancement or expansion of their agricultural operations.
The three most notable policy changes include:
· Establishing a new low-interest installment set-aside program
for financially distressed borrowers. Eligible financially
distressed borrowers can defer up to one annual loan installment
per qualified loan at a reduced interest rate, providing a
simpler and expedited option to resolve financial distress in
addition to FSA’s existing loan servicing programs.
· Providing all eligible loan applicants access to flexible
repayment terms that can increase profitability and help build
working capital reserves and savings. By creating upfront
positive cash flow, borrowers can find opportunities in their
farm operating plan budgets to include a reasonable margin for
increased working capital reserves and savings, including for
retirement and education.
· Reducing additional loan security requirements to enable
borrowers to leverage equity. This reduces the amount of
additional security required for direct farm loans, including
reducing the frequency borrowers must use their personal
residence as additional collateral for a farm loan.
Additional Farm Loan Program Improvements
Under the Biden-Harris Administration, USDA’s FSA has embarked
on a comprehensive and systemic effort to ensure equitable
delivery of Farm Loan Programs and improve access to credit for
small and mid-size family farms. FSA has also included
additional data in its annual report to Congress to provide
information that Congress, stakeholders, and the general public
need to hold USDA accountable on the progress that has been made
in improving services to underserved producers.
This year’s report shows FSA direct and
guaranteed loans were made to a greater percentage of young and
beginning farmers and ranchers, as well as improvements in the
participation rates of minority borrowers. The report also
highlights FSA’s microloan program’s new focus on urban
agriculture operations and niche market lending, as well as
increased support for producers seeking direct loans for farm
ownership in the face of increasing land values across the
country.
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FSA has a significant initiative underway to streamline and automate
the Farm Loan Program customer-facing business process. For the over
26,000 producers who submit a direct loan application annually, FSA
has made several impactful improvements including:
· The Loan Assistance Tool that provides customers with an
interactive online, step-by-step guide to identifying the direct
loan products that may be a fit for their business needs and to
understanding the application process.
· The Online Loan Application, an interactive, guided application
that is paperless and provides helpful features including an
electronic signature option, the ability to attach supporting
documents such as tax returns, complete a balance sheet, and build a
farm operating plan.
· An online direct loan repayment feature that relieves borrowers
from the necessity of calling, mailing, or visiting a local USDA
Service Center to pay a loan installment.
· A simplified direct loan paper application, reduced from 29 pages
to 13 pages.
USDA encourages producers to reach out to their local FSA farm loan
staff to ensure they fully understand the wide range of loan and
servicing options available to assist with starting, expanding, or
maintaining their agricultural operation. To conduct business with
FSA, please contact your local USDA Service Center
FSA helps America’s farmers, ranchers and forest
landowners invest in, improve, protect and expand their agricultural
operations through the delivery of agricultural programs for all
Americans. FSA implements agricultural policy, administers credit
and loan programs, and manages conservation, commodity, disaster
recovery and marketing programs through a national network of state
and county off ices and locally elected county committees. For more
information, visit,
www.fsa.usda.gov
USDA touches the lives of all Americans each day in so many positive
ways. In the Biden-Harris administration, USDA is transforming
America’s food system with a greater focus on more resilient local
and regional food production, fairer markets for all producers,
ensuring access to safe, healthy and nutritious food in all
communities, building new markets and streams of income for farmers
and producers using climate smart food and forestry practices,
making historic investments in infrastructure and clean energy
capabilities in rural America, and committing to equity across the
Department by removing systemic barriers and building a workforce
more representative of America. To learn more, visit
www.usda.gov.
[Illinois / USDA - FPAC
Farm Service Agency] |
