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USDA - Farm Service Agency Farm Loan Programs America’s Lender of First Opportunity!. United States Department of Agriculture (USDA) Farm Service Agency (FSA) Farm Loan Programs. America’s Lender of First Opportunity!. America’s Lender of First Opportunity!. - PowerPoint PPT Presentation
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USDA - Farm Service Agency
Farm Loan Programs
America’s Lender of First Opportunity!
United States Department of Agriculture (USDA)
Farm Service Agency (FSA)
Farm Loan Programs
America’s Lender of First Opportunity!
America’s Lender of First Opportunity!
FSA has been involved in agricultural lending for more than 70 years!
FSA offers loan and credit counseling assistance to farmers who want to own and operate their
own farm
Individualized farm and business planning expertise
America’s Lender of First Opportunity!
Loan products tailored to your farming operation and needs
Loans at low interest rates and extended terms
America’s Lender of First Opportunity!
Individualized decision-making based on your situation; not formula-driven lending
America’s Lender of First Opportunity!
Partner with wide variety of resources
Other lenders
Extension Service
Other experts
America’s Lender of First Opportunity!
Offer services not available by any other lender
FSA uses state-of-the-art farm planning software
America’s Lender of First Opportunity!
Sustained service
We stick with you – even through tough times
America’s Lender of First Opportunity!
How do we do it? Direct and Guaranteed
lending programs Operating loans (OL) Farm Ownership loans (FO) Emergency loans (EM)*
* Direct loan product, only
America’s Lender of First Opportunity!
Farm Loan Programs Beginning Farmers Socially Disadvantaged
applicants (SDA) General eligibility Getting started Resources Answer questions
America’s Lender of First Opportunity!
Farm Loan Programs
Direct Loans
Loan applications received and processed by FSA staff
Guaranteed Loans
Farmers work directly with a lender. The Lender then makes
arrangements with FSA for a guarantee.
America’s Lender of First Opportunity!
Direct Operating Loans (OL) Annual operating expenses
Seed, fuel, fertilizer, etc.
Machinery and livestock purchase
Direct Farm Ownership Loans (FO) Purchase farm real estate Improve real estate property
Emergency Loans (EM)
America’s Lender of First Opportunity!
Guaranteed Loan Programs
Operating Loans (OL)
Terms Loans and
Lines of Credit
Farm Ownership (FO) Loans
America’s Lender of First Opportunity!
America’s Lender of First Opportunity!
FSA Loan Limits
Direct loans OL - $300,000
FO - $300,000
EM - $500,000
Guaranteed loans $1,112,000 (FY 2010)
America’s Lender of First Opportunity!
FSA offers lending programs to a wide variety of farming operations
Smaller, larger, traditional, non- traditional…
Congressional targeting
America’s Lender of First Opportunity!
Congressional Targeting
Beginning Farmers
Socially Disadvantaged Applicants
America’s Lender of First Opportunity!
Beginning Farmers Has operated a farm for 10
years or less Meets requirements of the
program which he/she is applying
For FO loans, owns acreage of less than 30% of the
median size farm in the county
FSA does not use age in making thisdetermination
America’s Lender of First Opportunity!
Socially Disadvantaged Applicant
Defined by law -
“one who is a member of a socially disadvantaged group whose members have been subjected to racial, ethnic, or gender prejudice because of their identity as a member of a group without regard to their individual qualities.”
America’s Lender of First Opportunity!
Socially Disadvantaged Applicant For FLP purposes, *
American Indians or Alaskan Natives
Asians Blacks or African Americans Native Hawaiians or other Pacific
Islanders Hispanics women
* Other FSA programs may have different SDA definitions.
America’s Lender of First Opportunity!
Congressional Targeting All eligibility / loan feasibility
requirements must be met
Identification in these targeted groups often allows for easier access to limited program funds Funding targets are set by law
America’s Lender of First Opportunity!
Congressional Targeting
Down Payment Loan Program 5% - minimum down payment
45% - FSA direct loan (maximum $225,000)
Reduced interest rate
Balance will come from other sources (can be
guaranteed)
America’s Lender of First Opportunity!
General Eligibility
Different criteria may apply depending on loan programs involved Operating loans
Farm ownership loans
Emergency loans
America’s Lender of First Opportunity!
General Eligibility Need lender referral
US Citizen or legal resident alien
Acceptable credit history
Owner-operator or tenant operator
America’s Lender of First Opportunity!
General Eligibility Not be delinquent on a
federal debt
Not previously caused the Agency loss
In all cases, must demonstrate adequate Management Ability
America’s Lender of First Opportunity!
Management Ability Each loan program has
slightly different requirements Operating Loans
1-year complete production and marketing cycle (within the past 5 years)
Farm Ownership Loans 3 years complete production and
marketing cycle (within past 10 years)
America’s Lender of First Opportunity!
Financing start-up operations
Know what you want, but, be realistic
Write it down
Don’t expect everything – at least, not all at once
It may take years to accomplish your goals
America’s Lender of First Opportunity!
Business Plan How are you going to get
from here to there? Short and long term goals?
Plan conservatively Plan for contingencies
More than theoretical
More than internet research
America’s Lender of First Opportunity!
Business Plan
Flexible
Have records to support projections
Have good financial records
Get help from experts
America’s Lender of First Opportunity!
What is FSA looking for… Creditworthiness
History is a good indication of the future
Collateral Does FSA have enough security
to protect its investment?
America’s Lender of First Opportunity!
What is FSA looking for… Capacity
Can the farming operation repay the loan?
Capital What is the customers
contribution?
America’s Lender of First Opportunity!
What is FSA looking for… Conditions
What’s necessary to close the loan? Hazard insurance, etc.
America’s Lender of First Opportunity!
Finding FSA Resources
Via the internet …
www.fsa.usda.gov
America’s Lender of First Opportunity!
Questions
And
Answers??
America’s Lender of First Opportunity!
Every farming operation is different and impacted differently by many factors.
The information contained in this presentation is general in nature and intended to be used as a starting point for discussion. Regulations change frequently, impacting the validity and reliability of this information. This information should not be used as the sole basis of any decision. A thorough evaluation of your specific farming operation, situation and available FSA programs and requirements is necessary in every instance. Please contact your FSA staff to discuss your individual circumstances.
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