farm service agency farm loans program lender of first opportunity

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 farmersApproximately 80 local offices in Minnesota

FSA Farm Loans: Lender of First Opportunity

National Presence, Local Service

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.

Who We Help

Farmers that lack experience, credit history, or significant net worth

Socially disadvantaged farmers (women, minorities)

Farmers with non-traditional enterpriseso Vegetables, organic, specialty, value-added

Farmers experiencing economic, production, or physical disasters


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 Has Two Types of Loan Programs

Direct Loans

FSA loan officer works directly with the farmerComprehensive financial planning servicesRepayment terms tailored to farmer’s needs.Low interest rate

Operating, Real Estate, Emergency


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


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


Direct Farm Loans

Micro Loans

Purposes are same as direct operating loans


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


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


Maximum of $5,000

Town with a population of 50,000 or less


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


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


Farmer FSA Lender or Land Contract

% of Purchase Financed 5% <= 45% up to $225,000

>= 50%

Int. Rate 1.50% Lender Rate Terms 20 years 30 years Collateral required 2nd lien on farm 1st lien on farm

Direct Farm Loans – Real Estate

Down Payment - 5/45/50 - Example

$500,000 Farm Purchase 25,000 Cash down payment$250,000 Lender $225,000 FSA 2nd mtg -- 1.5% 20 yrs.


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


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


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.



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


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


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



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



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


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


Contact Us.

On the web: www.fsa.usda.gov/

http://www.fsa.usda.gov/

farm service agency farm loans program lender of first opportunity

Documents

direct farm loans youth

emergency fsa farm loans

guaranteed loans fsa

real estate fsa farm

future loans

opportunity slide

direct operating loans

farmers credit