USDA Provides Important Updates to Agricultural Lending Programs
Agricultural loan programs are being updated as part of the United States Department of Agriculture’s (USDA) efforts to provide more equitable services. The changes are designed to better support current borrowers, with a focus on historically underserved farmers. Agricultural loans are essential for producers because they give them access to the capital needed to operate a farming operation.
“The USDA remains committed to addressing barriers faced by all borrowers, especially those in economic difficulty, new and beginning producers, socially disadvantaged, or otherwise underserved,” Administrator of the Farm Service Agency (FSA) of the USDA, Zach Ducheneaux said in a press release. “We recognize that lending and servicing activities are essential for producers, especially during difficult times. This enhancement to our agricultural loan programs recognizes the needs of producers and, more importantly, enacts fair relief provisions to ensure they receive a fair share.
The requirements for direct farm ownership loans have been adjusted, allowing for additional elements to be included in the existing three-year farm experience requirements. The definition of veteran farmers is being expanded, along with the provision of additional benefits. The eligible issues as well as the people covered by the Certified Agricultural Mediation program have also been expanded. The amendments also allow borrowers who have benefited from an impairment restructuring to retain their emergency loan eligibility. Beginning and socially disadvantaged farmers will be able to receive a guarantee equal to 95%, in addition to the 90% guarantee otherwise applicable.
The FSA was authorized by the 2018 Farm Bill to provide some relief to certain direct borrowers. The additional flexibilities will allow for better assistance for borrowings that may have previously been needed to immediately repay the loans or convert them to more expensive out-of-program loans. The USDA encourages farmers and ranchers to learn more about the assistance available through agricultural loan programs by connecting with their local loan officers.