The Farm Service Agency (FSA) may guarantee loans eligible agriculture lenders make to family farmers. The primary purpose of the program is to enable lenders to provide credit to farmers who cannot otherwise obtain credit without the guarantee due to risk and other factors. FSA provides the ag lender with a guarantee covering up to 90 percent, in most cases. In certain limited circumstances, a 95% guarantee is available. FSA has the responsibilities of approving all loan guarantees and providing technical assistance to the lender in order to accomplish the objectives of the guaranteed loan program. The Farm Service Agency can guarantee operating and farm ownership loans up to $1,355,000.
Guaranteed Farm Ownership (FO) Loans may be made to purchase farmland, construct or repair buildings and other fixtures, develop farmland to promote soil and water conservation, or to refinance debt. Guaranteed Operating Loans (OL) may be used to purchase livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance, and other operating expenses. Operating Loans can also be used to pay for minor improvements to buildings, costs associated with land and water development, family living expenses, and to refinance debts under certain conditions.
To qualify for an FSA Guarantee, a loan applicant must:
• be a citizen of the United States, a non-citizen national, or qualified alien under applicable Federal immigration laws
• have an acceptable credit history as determined by the lender.
• have the legal capacity to incur the obligations of the loan.
• be unable to obtain a sufficient credit without a guarantee.
• not been convicted of planting, cultivating, growing, producing, harvesting, or storing a controlled substance within the last 5 crop years.
• meet all requirements about prior debt forgiveness.
• not have any outstanding recorded judgments obtained by the United States in a Federal court.
• be the owner or tenant operator of a family farm after the loan is closed. For an OL, the producer must be the operator of a family farm after the loan is closed. For an FO Loan, the producer needs to also own the farm.
• not be delinquent on any Federal debt.
What Other Criteria Does FSA Consider?
In addition to meeting the eligibility criteria, the loan applicant must have a satisfactory credit history, demonstrate repayment ability, and provide sufficient security for the loan.
Where to Go for More Information
Talk to your local lender as applications are submitted through them. Further information and applications for FSA loan programs are available at the Pettis County Farm Service Agency at 1407 W. 32nd St., Sedalia, Mo., 65301 or call (660) 826-3339 Ext. 108.