Farm Service Agency (FSA) Loan

FSA loans are financing programs created to aid the operational needs of farmers and ranchers in the country. They come in various forms with different requirements, amount, terms and interest rates. Let's examine these loans:

Beginning Farmers and Ranchers Loans - Are funds offered to recipients who just started engaging in the farming and ranching business and are unable to secure loans from commercial lenders. The maximum amount available is $300,000 with a 20-year term and an interest rate of 4%.

Direct Farm Loans - 3 types of loans are available under this program: farm ownership, operating emergency, and youth loans. The amount, repayment term, and interest rates depend on the type of loan an individual applies, the value of collateral, and his or her ability to repay.

Emergency Farm Loans - This form of financing grants funding to borrowers whose business operations are affected by natural disasters. The FSA allows a maximum amount of $500,000 to be borrowed. It has an interest rate of 3.75%. Loans obtained for non-real estate purposes are repayable up to 7 years, while funding acquired to finance losses of real estate are repaid within 30 years.

Socially Disadvantaged Farmers and Ranchers Loans - Recipients of this program are farm and ranch operators who have been under ethnic, racial, or gender prejudices. The allowed amount a farmer/rancher can borrow is up to $225,000. Interest rates and loan terms is the same as the beginners' loans.