Direct Operating FSA Loans: Online Applications

Farm Service Agency, or FSA loans come in 2 primary forms: direct and indirect guarantees. Direct loans are funds given straight through the FSA, and indirect loans come through private lenders but are guaranteed by the organization. In these broad categories, there are also ownership loans and operating loans. Ownership loans help you buy a farm or ranch, and operating loans help you improve the land you already own. Applying for a direct operating loan means you are looking to receive government funding for the management or operation of your existing farm or ranch. You can apply online to streamline the process.

About eForms Options

The FSA has an online loan application called "eForms" to allow you both find the forms you need and fill them out electronically. Each form comes with instructions in a separate file, so you will easily be able to complete the forms on your own. You will, however, have to print out the forms to mail or fax them in. You may also go to a local office of the FSA to submit your forms.

Submitting eForms Online

If you wish to e-File your forms, you will need to set up a special account. You have to first register for a USDA ID and Password. There is an authentication site that provides this service, and you can find it at this link: http://www.eauth.egov.usda.gov/eauthCreateAccount.html. E-filing is important for a number of reasons, but it is mostly useful to expedite your application. You will also find a number of helpful tools online at the FSA website while you are filling out your forms if you have any questions.

Loan Qualifications

Qualifying for a direct loan is slightly more challenging than qualifying for a loan guaranty. Direct loans are only distributed through the FSA when a borrower is not able to get financing from other sources. This means you will have to first attempt to get loans from private lenders before you can apply. If you have had difficulty getting a rural loan from other sources, you may want to consider whether you will qualify for this option.

  • You will need to have experience operating a family sized farm for between 3 and 10 years. It is okay if you have not owned a farm in the past, but you must be applying for a loan for a farm you own and/or operate.
  • Your farm must be family-sized. This is not a large commercial loan program. Rather, this is more similar to a small business loan. The limits are set in a way to only permit those small farmers and ranchers in need of moderate amounts of funding to qualify.
  • You need to be credit worthy. Many people make the mistake of thinking the government is willing to lend to borrowers who are undesirable on the broader market. While these loans go to people who cannot get loans elsewhere, the borrowers must still show they will pay off the loan based on their income, expertise and business plan.