Farm Service Agency
Farm Loans Program
Lender of First Opportunity
Delivery of FSA Programs
Congress enacts and funds programs
Secretary of Agriculture
Administrator, Farm Service Agency
Develops regulations, policies, procedures to implement the programs
State Executive Director carries out the programs in each state
Local Offices deliver the programs to farmers
Approximately 80 local offices in Minnesota
FSA Farm Loans: Lender of First Opportunity
National Presence, Local Service
FSA Farm Loans: Lender of First Opportunity
What We Do In Farm Loan Programs
Provide temporary assistance
through loans, credit
counseling, and management
advice to farmers to improve
the farmer’s financial position
so that the farmer may qualify
for future loans through
commercial credit sources.
FSA Farm Loans: Lender of First Opportunity
Who We Help
Farmers that lack experience, credit history, or significant net
worth
Socially disadvantaged farmers (women, minorities)
Farmers with non-traditional enterprises
o Vegetables, organic, specialty, value-added
Farmers experiencing economic, production, or physical
disasters
FSA Farm Loans: Lender of First Opportunity
FSA helps thousands of Minnesota
farm families….
2,736 farm families with $382 million of direct loans
1,866 farm families with a $657 million of guaranteed
loans
FSA is involved in financing 10% of Minnesota’s
farmers
FSA Farm Loans: Lender of First Opportunity
FSA Has Two Types of Loan Programs
Direct Loans
FSA loan officer works directly with the farmer
Comprehensive financial planning services
Repayment terms tailored to farmer’s needs.
Low interest rate
Operating, Real Estate, Emergency
FSA Farm Loans: Lender of First Opportunity
FSA Has Two Types of Loan Programs
Guaranteed Loans
Provides farmers credit through a conventional lender
Used as risk reduction tool
Lender determines the interest rate and loan terms.
Acts like an “insurance policy”
Operating and Real Estate
FSA Farm Loans: Lender of First Opportunity
Direct Farm Loans
Operating Loans
Buy livestock, equipment, crop inputs, feed, expenses,
refinance debt
Low, fixed interest rate (1.375%)
Repayment terms tailored to loan purpose and farmer’s
repayment ability.
Typically 1 – 7 years.
Maximum of $300,000
Collateral would include the property being financed
FSA Farm Loans: Lender of First Opportunity
Direct Farm Loans
Micro Loans
Purposes are same as direct operating loans
Low, fixed interest rate (1.375%)
Repayment terms tailored to loan purpose and farmer’s
repayment ability.
Typically 1 – 7 years.
Maximum of loan of $35,000 and total outstanding direct
operating balance not to exceed $35,000
Minimal farm training and managerial ability
Collateral would include the property being financed
FSA Farm Loans: Lender of First Opportunity
Direct Farm Loans
Youth Loans
Teach responsibility, caretaking, money management
Start a modest agricultural income producing project
4-H or FFA
Youths between ages of 10 and 20
Low, fixed interest rate (1.375%)
Maximum of $5,000
Town with a population of 50,000 or less
FSA Farm Loans: Lender of First Opportunity
Direct Farm Loans
Real Estate Loans
Purchase farmland, building sites, construction, repair
Low, fixed interest rate (1.5% - 3.5%)
Repayment terms usually 20 - 40 years.
Maximum of $300,000
Collateral would include farm being financed
3 years previous management experience
FSA Farm Loans: Lender of First Opportunity
Direct Farm Loans – Real Estate
Down Payment - 5/45/50
Used to purchase farm
Farmer must provide at least 5% down payment
Open only to beginning farmers and socially
disadvantage applicants
% of Purchase Financed
Int. Rate
Terms
Collateral required
Farmer
FSA
5%
<= 45%
up to $225,000
1.50%
20 years
nd
2 lien on farm
Lender or Land
Contract
>= 50%
Lender Rate
30 years
st
1 lien on farm
FSA Farm Loans: Lender of First Opportunity
Direct Farm Loans – Real Estate
Down Payment - 5/45/50 - Example
$500,000
25,000
$250,000
$225,000
Farm Purchase
Cash down payment
Lender
FSA 2nd mtg -- 1.5% 20 yrs.
FSA Farm Loans: Lender of First Opportunity
Guaranteed Farm Loans
Operating Loans
Up to $1,302,000
Line of credit
Purchase annual operating expenses
Up to 5 years
Term Loan
Buy livestock, equipment, refinance debt, and
etc.
Usually 1 – 7 years
FSA Farm Loans: Lender of First Opportunity
Guaranteed Farm Loans
Real Estate Loans
Up to $1,302,000
Buy farmland, construction, repairs, refinancing
Up to 40 years
Guarantee allows loan to be sold on secondary market
FSA Farm Loans: Lender of First Opportunity
General qualifications for all loans
Own/Operate a family-sized farm
Sufficient farm training and managerial ability
Meet citizenship requirements
Be unable to obtain loan from a commercial lender
Acceptable credit history
Legal capacity to incur the debt.
FSA Farm Loans: Lender of First Opportunity
General qualifications for all loans
No previous loss to the government
There are some exceptions depending on type of
loan
No conviction for controlled substance
No federal crop insurance disqualification
No delinquent federal debt
FSA Farm Loans: Lender of First Opportunity
Special qualification for direct Farm
Ownership loan
Applicant must have 3 years of farm
experience within the past 10 years

Met by either farming on own or providing
labor and management on a farm
FSA Farm Loans: Lender of First Opportunity
Special qualification for direct Farm
Ownership Downpayment loan


Beginning Farmers
 Must not have farmed for more than 10 years
 Must not own more than 30% of average median
farm size for the county
Socially Disadvantage Applicants
 Years farmed and farm size do not apply
FSA Farm Loans: Lender of First Opportunity
General qualifications for all loans
Farmer must have ability to repay the loan
• Must demonstrate ability to pay all farm expenses,
personal living expenses, and all debt payments
from farm and non-farm income sources.
• FSA considers financial ratios but does not base
loan decision on ratios.
Farmer must pledge collateral with a value at least
equal to the loan amount
• FSA will take a lien on more collateral when
available
FSA Farm Loans: Lender of First Opportunity
We offer more than just loans
Farm Planning
Analyze income, expenses, and production at end of the
production year
Assist farmer in developing a cash flow projection for the next
year
Assist farmer in analyzing expansion, capital purchases, or
enterprise changes
The success of our customers is the cornerstone of our
business
FSA Farm Loans: Lender of First Opportunity
We offer more than just loans
Professionals with training and backgrounds in lending and
agriculture.
Customers gain a source of guidance
Help farmers establish goals for their farming operation
Periodic visits to the farm
FSA Farm Loans: Lender of First Opportunity
Contact Us.
On the web: www.fsa.usda.gov/