To
assist eligible farmers, ranchers, and aquaculture operators, including
farming cooperatives, corporations, partnerships, and joint operations,
through the extension of credit and supervisory assistance to: Become
owner-operators of not larger than family farms; make efficient
use of the land, labor, and other resources; carry on sound and
successful farming operations; and enable farm families to have
a reasonable standard of living.
TYPES
OF ASSISTANCE:
Direct Loans. Place Cursor Here for Definition
Guaranteed/Insured Loans. Place Cursor Here for Definition
USES
AND USE RESTRICTIONS:
Loan
funds may be used to: (1) Enlarge, improve, and buy family farms;
(2) provide necessary water and water facilities; (3) provide basic
soil treatment and land conservation measures; (4) construct, repair,
and improve essential buildings needed in the operation of a family
farm; (5) construct or repair farm dwellings; (6) provide facilities
to produce fish under controlled conditions.
ELIGIBILITY
REQUIREMENTS:
Applicant
Eligibility: An applicant must: (1) Not have
caused a loss to the Agency after April 4, 1996, or received debt
forgiveness on more than 3 occasions prior to April 4, 1996 to receive
a guaranteed loan; (2) be unable to obtain suitable credit from
other sources at reasonable rates and terms; (3) be a U.S. citizen
or permanent resident and possess the legal capacity to incur the
obligations of the loan; (4) have the necessary education and/or
experience, training, and managerial ability to operate a family
farm; (5) realistically project the ability to repay the loan; (6)
be the owner-operator of a not larger than family farm after the
loan is closed; and (7) if an individual, the applicant must not
have a combined farm ownership, soil and water, and recreation loan
indebtedness to FSA of more than $200,000, for direct loans; and
$717,000 (amount adjusted annually for inflation) for a guaranteed
loan(s), or a combination of direct and guaranteed indebtedness;
or a total indebtedness against the property securing the loan(s)
of more than the market value of the security, whichever is the
lesser amount. If a cooperative, corporation, joint operation or
partnership, the entity must be controlled by farmers or ranchers
engaged primarily and directly in farming in the U.S., after the
loan is made, and must consist of members, stockholders, partners,
or joint operators (8) have a minimum of 3 years farming experience.
Assistance is authorized for eligible applicants in the 50 States,
the Commonwealth of Puerto Rico, the Virgin Islands of the United
States, Guam, American Samoa, the Commonwealth of the Northern Mariana
Islands, and, to the extent the Secretary determines it to be feasible
and appropriate, the Trust Territories of the Pacific Islands. Applicants
must also comply with the highly erodible land and wetland conservation
provisions of Public Law 99-198 of the Food Security Act of 1985
(FSA). To be eligible to obtain a direct loan, a borrower must abide
by the Agency's borrower training requirements. Applicants/borrowers
requesting guaranteed loan assistance must meet all lender requirements.
Beneficiary
Eligibility: Applicants/borrowers are the
direct beneficiaries and must meet the applicant eligibility requirements.
Families, individuals, and entities who are farmers, ranchers
or aquaculture operators are the beneficiaries.
Credentials/Documentation:
Applicants must prove that credit is not available elsewhere for
the requested purpose; and that they possess sufficient training
or farm experience. This program is excluded from coverage under
OMB Circular No. A-87.
Pre-application
Coordination: An applicant should consult the
office or official designated as the single point of contact in
his or her State for more information on the process the State requires
to be followed in applying for assistance, if the State has selected
the program for review. This program is excluded from coverage under
OMB Circular No. A-102 and E.O. 12372.
Application
Procedure: Applicants file Form FSA 410-1,
Application for FSA Services, with supporting information, at
the local county office of the Farm Service Agency for direct
loans or Form FSA 1980-25 with the prospective lender for loan
guarantees. This program is excluded from coverage under OMB Circular
No. A-110.
Award
Procedure: Certification as to eligibility
is made the Agency credit officials and an approval determination
is made by an FSA official based on loan feasibility and soundness,
and adequate security.
Deadlines:
None.
Range
of Approval/Disapproval Time: The loan approval
official must approve or disapproves a completed application within
30 days on a guaranteed loan application and 60 days on a direct
loan application.
Appeals:
Applicants for direct and guaranteed loans, may appeal adverse
actions taken. The applicant is given an opportunity to appeal
the decision to the National Appeals Staff. For guaranteed loans,
both the lender and the applicant must request the appeal.
Renewals:
Applicants may reapply at any time. Applicants denied assistance
through the appeal process must establish that substantial change
has occurred, since the denial decision.
ASSISTANCE
CONSIDERATIONS:
Formula
and Matching Requirements: The selected criteria
identify essential elements considered necessary to compare the
needs of the various States, and to make the best use of available
program funds. This program has no statutory formula or matching
requirements.
Length
and Time Phasing of Assistance: Loans justified
may be scheduled over a period up to 40 years. The interest rate
for guaranteed loans is negotiated between the lender and borrower.
Obligations:
(Direct Loans) FY 01 $233,024,000; FY 02 est $130,518,000; and
FY 03 est $291,139,000. (Guaranteed Loans) FY 01 $873,468,000;
FY 02 est $1,009,695,000; and FY 03 est $1,052,558,000.
Range
and Average of Financial Assistance:
Maximum direct $200,000, maximum guaranteed $731,000 (amount adjusted
annually for inflation). Average direct $111,762, guaranteed
$250,421.
Loans are used to purchase, enlarge, and improve family farms. In
fiscal year 2001, 2,085 direct, and 3,488 guaranteed loans were
made.
REGULATIONS,
GUIDELINES, AND LITERATURE:
7 CFR, Part 1943, Subpart A and Part 762. Farm Service Agency Fact
Sheets; FSA Handbook 2 FLP; Program Aids 1610, "Farm Service Agency
Producer's Guide to Loan Programs"; and 1620, "Lender's Guide to
FSA Loan Programs."
INFORMATION
CONTACTS:
Regional
or Local Office: Contact the appropriate FSA
State Office listed in Appendix IV of the Catalog.
Headquarters
Office: Department of Agriculture, Farm Service
Agency, Director, Loan Making Division, Ag Box 0522, Washington,
DC 20250. Telephone: (202) 720-1632.
