Emergency FSA Loans: Loan Requirements

Emergency FSA loans are available to help farmers and ranchers recover after suffering financial loss from a quarantine or natural disaster. Applying for an Emergency FSA loan can be both quick and easy so long as the borrower meets the necessary criteria required by the Farm Service Agency (FSA) of the United States Department of Agriculture.

Applicant's Eligibility

Any US citizen or permanent resident farmer whose land is used for farm production is eligible for an emergency FSA loan. If you meet this qualification and wish to obtain a loan, you will also need to prove that you have significant experience in crop production or livestock farming. Furthermore, the land or ranch you operated must have been declared a disaster zone or quarantine area and must have suffered a 30 percent loss in production, property, or livestock as a result of the quarantine or natural disaster.

Your chances of having your loan application approved will be significantly enhanced if you have good credit but have had your application denied by a commercial lending institution.

Loan Collateral

Generally, the FSA requires that all emergency loan applicants provide collateral large enough to secure the loan. If you cannot provide such collateral, you will be required to adequately demonstrate your capacity to repay the loan.

The type of collateral required depends on the following factors:

  • the purpose of the loan
  • the applicant's ability to repay the borrowed funds
  • the borrower's special circumstances

Conditions of the Agreement

Unlike private or commercial lenders, the FSA has a set of conditions that all applicants should observe in order to obtain approval for an emergency FSA loan:

  • The applicant must present the farm records specified by the FSA.
  • The applicant must develop a sustainable farm plan and present it to the FSA office. The farm or ranch should be operated according to what is indicated on the plan.
  • If the FSA so desires, the applicant must attend a training program on financial management.
  • The applicant may be advised to obtain crop insurance in order to protect against future natural disasters.

Deadline of Application

All borrowers should submit their emergency FSA loan application within eight months of the date of the declared disaster or quarantine order. Failure to abide by the designated date will make the applicant's application invalid.