Farm ownership and farm operating loans to agricultural producers are available through the U.S. Department of Agriculture Farm Service Agency.

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Farm ownership and farm operating loans to agricultural producers are available through the U.S. Department of Agriculture Farm Service Agency.


The information provided by the FSA offering is aimed for those who may not have had success in receiving loans from traditional financial institutions due to COVID-19.


“Farming and ranching is a capital-intensive business, and FSA is committed to helping producers maintain their agricultural operations during this time of crisis,” said FSA state executive director in Kansas David Schemm. “FSA loans are designed to assist beginning and historically underserved farmers and ranchers, as well as those who have suffered financial setbacks from natural disasters or economic downturns.


"Producers may find that an FSA loan is the best option for them if they cannot qualify for a loan with their traditional financial institutions or other financial institutions because of COVID-19.”


A variety of loans for production needs are offered through the USDA, and the FSA says it can guarantee up to 95% of the loss of principal and interest on a loan.


For producers who do not meet the lender’s normal underwriting criteria, the FSA guarantee allows lenders to make agricultural credit available with farm ownership loans and farm operating loans being the guaranteed loan program offers.


According to the USDA, farm ownership loan funds may be used to purchase or enlarge a farm or ranch, purchase easements or rights of way needed in the farm’s operation, build or improve buildings such as a dwelling or barn, promote soil and water conservation and development, and pay closing costs.


The USDA said the farm operating loan funds may be used to purchase livestock, poultry, farm equipment, fertilizer and other materials necessary to operate a farm.


"Operating loan funds can also be used for family living expenses; refinancing debts under certain conditions; paying salaries for hired farm laborers; installing or improving water systems for home, livestock or irrigation use; and other similar improvements," the USDA said in a news release. "Repayment terms for direct operating loans are scheduled from one to seven years. Financing for direct farm ownership loans cannot exceed 40 years.


"Interest rates for direct loans are set periodically according to the government’s cost of borrowing."


For more information on the farm loan programs, contact your local FSA office or visit farmers.gov.


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