USDA farm loan program changes now in effect

Sep 27, 2024

As of Wednesday, September 25, the U.S. Department of Agriculture’s (USDA) long-awaited updates to the Farm Service Agency’s (FSA) Farm Loan Programs are officially in effect. These changes, part of the Enhancing Program Access and Delivery for Farm Loans rule, are designed to increase financial flexibility for agricultural producers, allowing them to grow their operations, boost profitability, and build long-term savings.

These program updates reflect USDA’s ongoing commitment to supporting farmers’ and ranchers’ financial success and resilience nationwide. They offer critical tools to help borrowers manage their finances more effectively.

What the new rules mean for borrowers and potential borrowers:

Low-interest installment set-aside program: Financially distressed borrowers can now defer up to one annual loan payment at a reduced interest rate. This simplified option helps ease financial pressure while keeping farming operations running smoothly.

Flexible repayment terms: New repayment options allow borrowers to increase their cash flow and build working capital reserves, allowing for long-term financial planning that includes saving for retirement, education, and other future needs.

Reduced collateral requirements: FSA has lowered the amount of additional loan security needed for direct farm loans, making it easier for borrowers to leverage their existing equity without putting their personal residence at risk.

These new rules provide more financial freedom to borrowers. By giving farmers and ranchers better tools to manage their operations, FSA is helping them build long-term financial stability. They aim to ensure farmers and ranchers can keep their land, grow their businesses, and invest in the future.

The USDA encourages borrowers and potential borrowers to contact their local FSA farm loan staff to learn about the wide range of loan-making and servicing options available to assist with starting, expanding, or maintaining an agricultural operation.

To conduct business with FSA, please contact your local USDA Service Center.