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Serving: United States
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5 changes to USDA FSA farm loan program

Changes include Direct Operating Loan limit raised to $400,000 and producers can receive both ownership and operating microloan.

USDA has raised farm loan limits. The changes are occurring because the 2018 Farm Bill increased the amount that producers can borrow through direct and guaranteed loans available through USDA’s Farm Service Agency and made changes to other loans, such as microloans and emergency loans.

“As natural disasters, trade disruptions, and persistent pressure on commodity prices continue to impact agricultural operations, farm loans become increasingly important to farmers and ranchers,” FSA Administrator Richard Fordyce said. “The 2018 Farm Bill provides increased loan limits and more flexibility to farm loans, which gives producers more access to credit when they need it most.”

Key changes include:

  • The Direct Operating Loan limit increased from $300,000 to $400,000, and the Guaranteed Operating Loan limit increased from $ 1.429 million to $1.75 million. Operating loans help producers pay for normal operating expenses, including machinery and equipment, seed, livestock feed, and more.
  • The Direct Farm Ownership Loan limit increased from $300,000 to $600,000, and the Guaranteed Farm Ownership Loan limit increased from $1.429 million to $1.75 million. Farm ownership loans help producers become owner-operators of family farms as well as improve and expand current operations.
  • Producers can now receive both a $50,000 Farm Ownership Microloan and a $50,000 Operating Microloan. Previously, microloans were limited to a combined $50,000. Microloans provide flexible access to credit for small, beginning, niche, and non-traditional farm operations.
  • Producers who previously received debt forgiveness as part of an approved FSA restructuring plan are now eligible to apply for emergency loans. Previously, these producers were ineligible.
  • Beginning and socially disadvantaged producers can now receive up to a 95% guarantee against the loss of principal and interest on a loan, up from 90%.

About farm loans

Direct farm loans, which include microloans and emergency loans, are financed and serviced by FSA, while guaranteed farm loans are financed and serviced by commercial lenders. For guaranteed loans, FSA provides a guarantee against possible financial loss of principal and interest.

Source: USDA Farm Service Agency, which is solely responsible for the information provided and is wholly owned by the 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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