Changes To Farm Service Agency Farm Loans
The new Farm Bill made some important changes to the Farm Service Agency (FSA) farm
loan programs that have already been implemented according to Bob Noellsch, Farm
Loan Manager for Lincoln, Pike, St. Charles, and Warren Counties. Noellsch says "the
maximum loan for Direct Farm Operating and Direct Farm Ownership Loans has increased
from $200,000-$300,000".
Noellsch also says that the Farm Ownership Down Payment Loan program has been
significantly changed and improved. It was expanded to include Socially Disadvantaged
Applicants (one of a group whose members have been subjected to racial, ethnic, or
gender prejudice because of their identity as a member of the group without regard to
their individual qualities; these groups include women, African Americans, American
Indians, Alaskan Natives, Hispanics, Asian Americans and Pacific Islanders) as well as
beginning farmers (have farmed for 10 years or less and do not own real estate that
exceeds 30 percent of the average size farm in the county). According to Noellsch, the
other changes are: the required down payment is reduced from 10 percent to 5 percent,
the length of the FSA loan is extended from 15 years to 20 years, the interest rate is
reduced to the Direct Farm Ownership rate less 4 percent or 1.5 percent whichever is
greater, and the maximum loan amount changed from $100,000 to an amount not
exceeding 45 percent of the least of the purchase price of the farm, the appraised value
of the farm, or $500,000.
Other parts of the Down Payment Loan program did not change. Noellsch says that the
balance of the credit for the farm purchase would still come from another lender or the
seller; their loan must be for at least 20 years with a 30 year amortization. The other
eligibility requirements remain the same according to Noellsch. Eligibility requirements
include: the purchaser must be the owner and operator of a family size farm after the loan
is made, the purchaser must be unable to get the credit needed for the farm purchase
without the FSA loan, must have participated in the business operations of a farm for at
least three years, and must have a good credit history.
To find out more about the FSA loan programs, you may contact Noellsch at 324-3313,
ext. 2 or e-mail robert.noellsch@ mo.usda.gov.