The USDA Farm Service Agency reminds producers the agency offers targeted farm ownership and farm operating loans to assist underserved applicants and beginning farmers and ranchers.
USDA defines underserved applicants as a group whose members have been subjected to racial, ethnic or gender prejudice because of their identity as members of the group without regard to their individual qualities.
For loan program purposes, targeted underserved groups are women, African Americans, American Indians and Alaskan Natives, Hispanics and Asians and Pacific Islanders.
Underserved or beginning farmers and ranchers who cannot obtain commercial credit from a bank can apply for either FSA direct loans or guaranteed loans. Direct loans are made to applicants by FSA. Guaranteed loans are made by lending institutions who arrange for FSA to guarantee the loan.
FSA can guarantee up to 95% of the loss of principal and interest on a loan. The FSA guarantee allows lenders to make agricultural credit available to producers who do not meet the lender’s normal underwriting criteria.
The program provides for two types of loans: Farm ownership loans and farm operating loans. In addition to customary farm operating and ownership loans, FSA offers microloans through the direct loan program. Microloans focus on the financing needs of small, beginning farmer, niche and nontraditional farm operations. Microloans are available for both ownership and operating finance needs. To learn more, visit fsa.usda.gov/microloans.
To qualify as a beginning producer, the individual or entity must meet the eligibility requirements outlined for direct or guaranteed loans. Individuals and all entity members must have operated a farm for less than 10 years. Applicants must materially or substantially participate in the operation.
For information on FSA’s farm loan programs and targeted underserved and beginning farmer guidelines, contact your local USDA Service Center or visit fsa.usda.gov/farmloans. The Jackson County Service Agency number is 812-358-2367.