SECURING FINANCIAL SUPPORT
Each year the USDA’s Farm Service Agency (FSA) supports farmers and ranches with billions of dollars in financial loans at low interest rates. This support helps to empower the agricultural industry and allows it to continue to grow for generations to come.
This and other agencies and lenders specializing in loans for agriculture are the foundation for land purchase and operations which can be used to expand livestock and equipment.
Let’s look at the available loan programs that may help you with acquiring farmland or ranchland.
Guaranteed Farm Loans
FSA’s Guaranteed Farm Loan Programs works with USDA-approved commercial lenders to help farmers and ranchers purchase farmland or aid with the cost of running an agricultural operation. The level of support for guaranteed loans is up to $2,251,000. This FSA loan benefits farmers and commercial lenders by acting as a safety net with a guarantee of up to 95 percent against possible financial loss of principal and interest.
The Guaranteed Loan Program doesn’t provide the loan directly, it helps in securing the loan via an approved commercial lender. The FSA will reimburse the lender in the event of a loss based on the agreed loan terms.
FARM OWNERSHIP LOANS
These guaranteed loans can be utilized to purchase farmland, for construction or building repair or to promote soil/ water conservation.
FARM OPERATING LOANS
Used to purchase livestock, equipment, seed insurance and all other operating expenses.
EZ GUARANTEE LOANS
This Guaranteed Farm Loan program refers to smaller loans up to $100,000 for operating costs and ownership. This program offers a faster and less complex road to access funds.
Conservation Loan
FSA guarantees loans to promote conservation practices on farms and ranches that help protect natural resources throughout the United States. FSA’s Conservation Loans are available to both smaller and less financially established farmers and ranchers and to larger and financially stronger farmers and ranchers.
FSA guarantees Conservation Loans with loan limits up to $2,251,000.
FSA Conservation Loans are for implementing conservation practices approved by the USDA’s Natural Resources Conservation Service (NRCS), such as:
- Reducing soil erosion;
- Improving water quality; and
- Promoting sustainable andorganic agricultural practices
Land Contract (LC) Guarantee Program
The Land Contract (LC) Guarantee Program provides a valuable tool to transfer farm real estate to the next generation of farmers. Guarantees will be offered to the owner of a farm who wishes to sell real estate through a land contract to a beginning farmer or a farmer who is a member of a socially disadvantaged group. The guarantee provides an incentive to sell to individuals in these groups as it reduces the financial risk to the seller due to buyer default on the contract payments.
Guarantees can be used for financing the purchase of a farm with a purchase price up to $500,000 on a new land contract. The guarantee period is for up to 10 years for either type of guarantee, regardless of the term of the land contract.
Direct Loan Program
A direct loan is funded directly by the USDA. The money used for direct loans comes from annual Congressional appropriations received as part of the budget. The Agency is responsible for making and servicing the loan.
FSA’s Direct Loan Program is designed to help farmers start, purchase, or expand their farming operations.
From the beginning farmers who have a limited financial history to qualify for commercial credit to farmers who have suffered financial setbacks from natural disasters, FSA offers a variety of loans to provide additional resources farmers need to establish and maintain profitable farming operations. Farmers may apply for direct loans at their local FSA offices.
AGAMERICA LENDING
AGAmerica is a financial lender with a great understanding of rural America. They are a financial organization dedicated to helping farmers and ranchers secure financing to purchase land, grow equity, increase working capital or improve operations.
