Farmers Qualify for Special USDA Loans

Beginning and underserved agricultural producers are eligible for special loans from the United States Department of Agriculture.

BANGOR, Maine – Beginning and underserved agricultural producers are eligible for special loans from the United States Department of Agriculture.

USAD Maine Farm Service Agency Executive Director David R. Lavway reminded producers on November 23 that the agency offers specially targeted loans for property and farming to underserved applicants as well as farmers. and novice breeders.

“Each year, a portion of FSA loan funds are set aside to lend to targeted underserved and entry-level farmers and ranchers,” Lavway said.

“Agriculture and animal husbandry are capital intensive activities and FSA is committed to helping producers start and maintain their farming operations. “

In fiscal 2020 (October 1, 2019 to September 30, 2020), Maine FSA committed $ 9.1 million in loans to underserved borrowers and beginning farmers and ranchers.

The Department of Agriculture defines underserved applicants as a group whose members have been subjected to racial, ethnic, or gender bias because of their identity as members of the group without regard to their individual qualities. For the purposes of the Farm Loan Program, underserved groups are women, African Americans, Native American and Alaskan Indians, Hispanics and Asians, and Pacific Islanders.

In order to qualify as a beginning farmer, the person or entity must meet the eligibility requirements outlined for direct or guaranteed loans.

In addition, individuals and all members of the entity must have operated a farm for less than 10 years. Candidates must participate materially or substantially in the operation. For farm ownership purposes, the applicant must not own a farm greater than 30 percent of the mid-size farm in the county at the time of application.

All applicants for direct farm ownership must have been involved in the business operations of a farm for at least three years within the last 10 years prior to the date of submission of the application. If the applicant is an entity, all members must be related by blood or marriage and all members of the entity must be eligible entry-level farmers.

Underserved or entry-level farmers and ranchers who cannot obtain trade credit from a bank can apply for FSA direct loans or secured loans. Direct loans are granted to applicants by the FSA. Secured loans are granted by lending institutions which arrange for the FSA to guarantee the loan. FSA can guarantee up to 95% 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 Guaranteed Loan program offers two types of loans: farm property loans and farm loans.

Farm property loan funds can be used to buy or expand a farm or ranch, purchase any easements or rights of way needed to operate the farm, construct or improve buildings such as a dwelling or barn. , promote the conservation and development of soil and water and pay closing costs.

Farm loan funds can be used to purchase livestock, poultry, farm equipment, fertilizers, and other materials needed to run a successful farm. Funds from operating loans can also be used for family living expenses, refinancing debts under certain conditions, paying salaries of hired farm workers, installing or improving water supply systems. water for the house, livestock or irrigation and other similar improvements.

The repayment terms for direct operating loans depend on the collateral securing the loan and typically range from one to seven years. The financing of direct loans to agricultural property cannot exceed 40 years. Interest rates for direct loans are set periodically based on the government’s cost of borrowing. The secured loan terms and the interest rates are set by the lender.

The Aroostook County Agricultural Services Agency has three sites to service the region, with Doreen Conlogue being the County Executive Director. Offices are at 304 North St., Houlton, phone 532-9407, ext. 2; 735 Main Street, Presque Isle, 764-4151, ext. 2; and Fort Kent, 139 Market Street, 834-3831, ext. 2.

For more information on FSA’s agricultural loan programs and guidelines for underserved and entry-level farmers, contact your local office.

Source link

About Franklin Cheatham

Check Also

Fixed-rate student loan refinancing hits new low in January

Our goal here at Credible Operations, Inc., NMLS number 1681276, referred to as “Credible” below, …