Online FSA Loans for Socially Disadvantaged Farmers and Ranchers

FSA loans are designed to either directly provide funding for or indirectly guaranty funding for rural development. Farmers and ranchers loans, in particular, are intended to be an alternative to typical small business loans for family farmers. All FSA loans, like any loan, require minimum income and credit requirements in order for a borrower to qualify. However, FSA loans for socially disadvantaged farmers and ranchers are aimed at those borrowers who are credit worthy despite falling short of some typical requirements.

Income Requirements

One area where FSA approved lenders may consider an exception is income. Socially disadvantaged farmers and ranchers may have mid to low income, despite being relatively financially stable. Many private rural loan lenders would be concerned over the profitability of a loan made to a low income farmer. However, the FSA encourages family farms that are sustainable without huge profits, and agricultural loans are extended under these circumstances. 

Credit Requirements

Even if the FSA is willing to extend loan guarantees to lower-than-average earners, it will not guaranty loans for those who are not credit worthy. Credit worthiness is determined according to a borrower's debt history. Any borrower with loans approaching default or too much debt will not qualify. A borrower who has defaulted on a previous government loan will be automatically disqualified.

Individuals who have short credit histories, but do not have a bad history with debt may still have low credit scores. These individuals may qualify under the socially disadvantaged farmers and ranchers program. In fact, the direct loan program is designed for this type of borrower precisely. A borrower who is financially stable and responsible but lacks enough debt history to get a private loan may apply directly for FSA funds. 

Other Requirements

Government loans are directed to very specific projects and require very specific regulation. In terms of farm loans, these regulations are meant to determine a farmer's relative ability to sustain a profitable business in the long run. As such, farmers applying under the FSA program should have at least 10 years experience in the industry. They do not have to operate a private farm during that time, but experience on a farm or ranch is essential. The individual applying for the loan must also be taking a primary role in the operation of the farm or ranch in the future. There are minimum collateral requirements in most cases. 

Applying Online for an FSA Loan

The FSA makes it very easy to apply for loans online. The first step is to locate the appropriate program on the FSA website. Once you are certain which program you will apply for, locate the appropriate forms online through the USDA form site. You can click on browse forms to search for forms for either a direct loan or guaranteed loan program. Even if you fill out the forms by downloading a "pdf," it is typically necessary to go to your local service center in order to complete application processing. Your local service center can also answer any questions you may have with the process.