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The United States Department of Agriculture’s Farm Service Agency reminds growers that funding for targeted underserved groups and loans for beginning farmers are available.
Loan programs are designed to help farmers buy and operate family farms.
USDA Agricultural Services Agency serves Lawrence, Mercer, Allegheny, Armstrong, Beaver, Butler, Clarion, Elk, Indiana, Jefferson, and Washington counties
“With these loan programs, the FSA hopes to help reverse the dwindling number of farmers and ranchers across the United States and especially here in our region,” said Frank Urbanick, agricultural loans manager for the agency. “These loans encourage and help them own and operate their own farms and ranches, participate in agricultural programs, and become an integral part of the farming community.”
According to Urbanick, the FSA sets aside a portion of its loan funds for “targeted underserved groups” each year. The USDA defines a targeted underserved farmer as part of a group whose members have experienced racial, ethnic, or gender bias based on their identity as members of the group, regardless of their individual qualities. These groups, for the purposes of this program, include women, African Americans, American Indians and Alaska Natives, Hispanics, Asians, and Pacific Islanders.
The agency provides direct loans to farm and farm property applicants.
Repayment terms for direct operating loans depend on the collateral securing the loan and typically range from one to seven years, but according to Urbanick, repayment terms for direct ownership loans can be up to 40 years.
Interest rates for direct loans are set periodically based on the government’s cost of borrowing. The Down Payment Loan Program requires the applicant to provide a minimum down payment of 5% in cash, and the loan cannot exceed 45% of the lesser of the purchase price, the appraised value of the farm to be acquired, or 667,000 $ and for a term not to exceed 20 years, subject to the $600,000 limit for loans to direct farm owners. Down payment loans provided in the form of micro-loans for PO purchases cannot exceed $50,000.
Farm property loan funds can be used to purchase or expand a farm, purchase easements or rights of way necessary to operate the farm, erect or improve buildings such as a dwelling or barn, promote soil and water conservation and development and pay closing costs.
Funds from farm business loans can be used to purchase livestock, poultry, farm and household equipment, feed, seeds, fuel, fertilizers, chemicals, refinance debts, hail and other crop insurance, food, clothing, medical care and hired labor. Funds may also be used to install or improve water supply systems for domestic use, livestock or irrigation, and other improvements.
Individuals, partnerships, joint ventures, corporations and cooperatives primarily and directly engaged in agriculture and animal husbandry on family farms may apply. A family-sized farm is considered a farm that a family can operate and manage on their own.
Secured loans can also be made for ownership or operating purposes and can be made by a lending institution subject to federal or state supervision (banks, savings and loan companies, insurance companies and units of the agricultural credit system). Typically, the FSA guarantees 90 or 95% of a loan against any loss that might be incurred if the loan fails. The terms of the secured loan are set by the lender. Interest rates for secured loans are set by the lender.
Applicants must meet the eligibility criteria for a given program before the FSA can extend program benefits. For additional information or inquiries for all FSA direct loan programs, contact your local FSA office at 24 Avalon Court, Suite 200, Mercer, PA 16137 or by phone at 724-662-2890. The USDA is an equal opportunity employer, provider and lender.
