USDA - Farm Service Agency
Farm Loan Programs
America’s Lender of First Opportunity!
America’s Lender of First
Opportunity!

United States Department of
Agriculture (USDA)

Farm Service Agency (FSA)

Farm Loan Programs
America’s Lender of First
Opportunity!
 FSA has been involved in
agricultural lending for
more than 70 years!
 FSA offers loan and credit
counseling assistance
to farmers who want to
own and operate their
own farm
America’s Lender of First
Opportunity!
 Individualized farm and
business planning
expertise
America’s Lender of First
Opportunity!
 Loan products tailored to
your farming
operation and needs
 Loans at low interest
rates and extended
terms
America’s Lender of First
Opportunity!
 Individualized decision-
making based on your
situation; not formuladriven lending
America’s Lender of First
Opportunity!
 Partner with wide variety of
resources

Other lenders

Extension Service

Other experts
America’s Lender of First
Opportunity!
 Offer services not available
by any other lender
 FSA uses state-of-the-art
farm planning software
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Opportunity!
 Sustained service

We stick with you – even
through tough times
America’s Lender of First
Opportunity!
How do we do it?

Direct and Guaranteed
lending programs



Operating loans (OL)
Farm Ownership loans (FO)
Emergency loans (EM)*
* Direct loan product, only
America’s Lender of First
Opportunity!
Farm Loan Programs

Beginning Farmers

Socially Disadvantaged
applicants (SDA)

General eligibility

Getting started

Resources

Answer questions
America’s Lender of First
Opportunity!
Farm Loan Programs

Direct Loans


Loan applications received and
processed by FSA staff
Guaranteed Loans

Farmers work directly with a lender.
The Lender then makes
arrangements with FSA for a
guarantee.
America’s Lender of First
Opportunity!
Direct Operating Loans (OL)
 Annual operating expenses


Seed, fuel, fertilizer, etc.
Machinery and livestock purchase
Direct Farm Ownership Loans (FO)
 Purchase farm real estate
 Improve real estate property
Emergency Loans (EM)
America’s Lender of First
Opportunity!
Guaranteed Loan Programs


Operating Loans (OL)

Terms Loans and

Lines of Credit
Farm Ownership (FO) Loans
America’s Lender of First
Opportunity!
FSA Loan Limits


Direct loans

OL - $300,000

FO - $300,000

EM - $500,000
Guaranteed loans

$1,112,000 (FY 2010)
America’s Lender of First
Opportunity!
FSA offers lending programs
to a wide variety of farming
operations

Smaller, larger, traditional, nontraditional…

Congressional targeting
America’s Lender of First
Opportunity!
Congressional Targeting

Beginning Farmers

Socially Disadvantaged
Applicants
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Opportunity!
Beginning Farmers



Has operated a farm for 10
years or less
Meets requirements of the
program which he/she is
applying
For FO loans, owns acreage of
less than 30% of the median
size farm in the county
FSA does not use age in making this
determination
America’s Lender of First
Opportunity!
Socially Disadvantaged Applicant

Defined by law “one who is a member of a socially
disadvantaged group whose members
have been subjected to racial, ethnic,
or gender prejudice because of their
identity as a member of a group
without regard to their individual
qualities.”
America’s Lender of First
Opportunity!
Socially Disadvantaged Applicant
 For






FLP purposes, *
American Indians or Alaskan Natives
Asians
Blacks or African Americans
Native Hawaiians or other Pacific
Islanders
Hispanics
women
* Other FSA programs may have different SDA definitions.
America’s Lender of First
Opportunity!
Congressional Targeting

All eligibility / loan feasibility
requirements must be met

Identification in these targeted
groups often allows for easier
access to limited program
funds

Funding targets are set by law
America’s Lender of First
Opportunity!
Congressional Targeting

Down Payment Loan Program

5% - minimum down payment

45% - FSA direct loan (maximum
$225,000)


Reduced interest rate
Balance will come from other
sources (can be guaranteed)
America’s Lender of First
Opportunity!
General Eligibility

Different criteria may apply
depending on loan
programs involved

Operating loans

Farm ownership loans

Emergency loans
America’s Lender of First
Opportunity!
General Eligibility

Need lender referral

US Citizen or legal resident
alien

Acceptable credit history

Owner-operator or tenant
operator
America’s Lender of First
Opportunity!
General Eligibility

Not be delinquent on a federal
debt

Not previously caused the
Agency loss

In all cases, must demonstrate
adequate Management Ability
America’s Lender of First
Opportunity!
Management Ability

Each loan program has slightly
different requirements

Operating Loans


1-year complete production and marketing
cycle (within the past 5 years)
Farm Ownership Loans

3 years complete production and
marketing cycle (within past 10
years)
America’s Lender of First
Opportunity!
Financing start-up operations

Know what you want, but, be
realistic

Write it down

Don’t expect everything – at
least, not all at once

It may take years to accomplish
your goals
America’s Lender of First
Opportunity!
Business Plan

How are you going to get from
here to there?

Short and long term goals?

Plan conservatively

Plan for contingencies

More than theoretical

More than internet research
America’s Lender of First
Opportunity!
Business Plan

Flexible

Have records to support
projections


Have good financial records
Get help from experts
America’s Lender of First
Opportunity!
What is FSA looking for…

Creditworthiness


History is a good indication of the
future
Collateral

Does FSA have enough security to
protect its investment?
America’s Lender of First
Opportunity!
What is FSA looking for…

Capacity


Can the farming operation repay the
loan?
Capital

What is the customers contribution?
America’s Lender of First
Opportunity!
What is FSA looking for…

Conditions

What’s necessary to close the loan?

Hazard insurance, etc.
America’s Lender of First
Opportunity!
Finding FSA Resources

Via the internet …
www.fsa.usda.gov
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Opportunity!
Questions
And
Answers??
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Opportunity!
Every farming operation is different and impacted differently
by many factors.
The information contained in this presentation is general in
nature and intended to be used as a starting point for
discussion. Regulations change frequently, impacting
the validity and reliability of this information. This
information should not be used as the sole basis of any
decision. A thorough evaluation of your specific farming
operation, situation and available FSA programs and
requirements is necessary in every instance. Please
contact your FSA staff to discuss your individual
circumstances.