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Serving: IA
Drought damaged cornfield Courtesy of Iowa State University
EXTENSION: USDA is also allowing approved providers to give farmers up to a 60-day grace period to pay crop insurance premiums.

USDA extends deadlines, defers interest on loans

Borrowers can choose annual installment deferral option for farm storage facility loans.

To assist Farm Storage Facility Loan borrowers experiencing financial hardship from the pandemic and other challenges in agriculture, USDA’s Farm Service Agency (FSA) is offering a one-time annual installment payment deferral option. No fees or prepayment penalties apply for borrowers who choose this FSFL flexibility option. 

“Farmers are facing challenging times because of the pandemic, and FSA is looking for ways to offer flexibilities to help alleviate financial stress,” says Richard Fordyce, FSA administrator. “This storage facility loan servicing option affords eligible borrowers more time to make a payment and may stop loan acceleration, foreclosure or liquidation.”

Eligible borrowers can request a one-time only annual installment payment deferral for loans having terms of three, five, seven or 10 years. The FSFL installment payments will remain the same, except for the last year. The original loan interest rate and annual payment due date will remain the same.

But because the installment payment deferral is a one-year loan-term extension, the final payment will be higher due to additional accrued interest. The installment deferral option is not available for 12-year term loans. 

Additional FSA program changes

Borrowers interested in exercising the one-time annual installment deferral option should contact FSA to make the request, and to obtain, complete and sign required forms. The FSFL program provides low-interest financing for farmers to store, handle and transport eligible commodities.

In addition to offering flexibilities for FSFLs, FSA has also made other flexibilities to help producers impacted by the pandemic, including relaxing the loan-making process for farm operating and ownership loans, and implementing the Disaster Set-Aside provision that enables an upcoming installment on a direct loan to be set aside for the year. More information on these flexibilities is at farmers.gov/coronavirus.

More time to pay crop insurance premiums 

USDA also announced Aug. 6 it will authorize approved insurance providers (AIPs) to extend deadlines for premium and administrative fee payments, defer the resulting interest accrual, and allow other flexibilities to help farmers. “Farmers have been severely affected by the COVID-19 pandemic this year, and to help ease the burden, we are continuing to extend the flexibility,” says Sonny Perdue, USDA secretary. “The crop insurance flexibilities will help ensure the federal crop insurance program continues to serve as a vital risk management tool.”

USDA is authorizing AIPs to provide policyholders extra time to pay premium and administrative fees, and to waive accrual of interest to the earlier of 60 days after their scheduled payment due date or the termination date on policies with premium billing dates between Aug. 1 and Sept. 30, 2020. Also, USDA is authorizing AIPs to provide up to an additional 60 days for policyholders to make payment and waive additional interest for written payment agreements due between Aug. 1 and Sept. 30, 2020.

The USDA Risk Management Agency is authorizing flexibilities due to coronavirus while continuing to support producers, working through AIPs to deliver services, including processing policies, claims and agreements. RMA staff are working with AIPs and other customers by phone, mail and computer to continue supporting crop insurance coverage for farmers. Those with crop insurance questions or needs should contact their insurance agents about conducting business remotely. More information is at farmers.gov/coronavirus. 

Source: USDA, which is solely responsible for information provided and is wholly owned by source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset. 

 

 

 

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