FSA farm loans available
From staff reports
MIFFLINTOWN — The federal Farm Service Agency has funding reserved specifically for use by targeted underserved groups and beginning farmers designed to help farmers purchase and operate family farms, Robert E Zeigler Jr. of USDA’s FSA office that covers Mifflin, Juniata, Perryt and Dauphin counties, reminds producers today.
“With these loan programs, FSA hopes to help reverse the declining number of farmers and ranchers across the United States and especially here,” Zeigler said. “These loans help to encourage and assist them in owning and operating their own farms and ranches, participate in agricultural programs and become integral parts of the agricultural community.”
Zeigler said FSA reserves a portion of its loan funds each year for Targeted Underserved Groups, which USDA defines 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 purposes of this program, targeted underserved groups are women, African Americans, American Indians and Alaskan Natives, Hispanics, and Asians and Pacific Islanders.
Direct loans are made to applicants by FSA and include both farm operating and farm ownership loans. Repayment terms for direct operating loans depend on the collateral securing the loan and usually run from one to seven years. Zeigler said repayment terms for direct ownership loans can be as long as 40 years.
Interest rates for direct loans are set periodically according to 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 then 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 a term not to exceed 20 years.
Down payment loans made as Micro Loans for farm ownership purposes may not exceed $50,000.
Farm ownership loan funds may be used to purchase or enlarge a farm, purchase easements or rights of way needed in the farm’s operation, erect or improve buildings such as a dwelling or barn, promote soil and water conservation and development, or pay closing costs.
Farm operating loan funds may be used to purchase livestock, poultry, farm and home equipment, feed, seed, fuel, fertilizer, chemicals, refinance farm related debts other than real estate, hail and other crop insurance, food, clothing, medical care and hired labor. Funds also may be used to install or improve water systems for home use, livestock or irrigation and other improvements.
Individuals, partnerships, joint operations, corporations, and cooperatives primarily and directly engaged in farming and ranching on family-size operations may apply. A family-size farm is considered to be one that a family can operate and manage itself.
Guaranteed loans also may be made for ownership or operating purposes, and may be made by any lending institution subject to federal or state supervision. Typically, FSA guarantees 90 or 95 percent of a loan against any loss that might be incurred if the loan fails. Guaranteed loan terms are set by the lender. Interest rates for guaranteed loans are established by the lender.
Applicants must meet the eligibility requirements for a given program before FSA can extend program benefits. For more information or applications for all FSA direct loan programs contact the local FSA Office at 146 Stoney Creek Drive Suite 1, Mifflintown, or call (717) 436-4003.