Qualifications for a Farm Service Agency (FSA) Loan

FSA loans help farmers and ranchers obtain funding to operate their agriculture business. These loans are administered by the Farm Service Agency of the U.S. Department of Agriculture (USDA). They provide both direct and guaranteed support to farmers and ranchers who meet the requirements of the programs. The qualification for the various FSA loan programs are listed below.

Beginning Farmers and Ranchers Loans

The Beginning Farmers and Ranchers loan program gives direct and guaranteed loans through private lenders to farmers and ranchers who do not qualify for a commercial loan. To qualify for this loan program, a farmer or rancher may be an individual or business that has not been in operation for more than 10 years. The farmer or rancher must meet the program requirements for the loan and cannot own a farm that exceeds 30 percent of the median farm size in the county in which the farm or ranch resides. The farmer or rancher must have participated in the operation of the farm for at least 3 years and if the farm or ranch is a family corporation, each members of the corporation must be related and also qualify as beginning farmers or ranchers.

Direct Farm Loans

Direct Farm loans are funds made available by the FSA directly to farms as Farm Ownership (FO) loans. The qualifications for these loans are set locally by a FSA agency office within a farming community. To understand what those qualifications are, as they differ from jurisdiction to jurisdiction, an applicant should contact a local FSA office.

Emergency Farm Loans

Emergency Farm loans exist to help a farmer and ranchers recover from production losses due to natural disasters such as floods, drought or food quarantine.

Qualified applicants for emergency farm loans must own and operate the farm or ranch located in a natural disaster area, as declared by the President of the United States or Secretary of Agriculture. The farmer or rancher must be established agribusiness operators with a sufficient level of farming or ranching experience. The farmer or rancher must have experienced a minimum 30 percent crop loss due to the natural disaster.

There are credit and collateral requirements imposed on emergency farm loan applicants and the farmer or rancher must have the ability to repay the loan.

Guaranteed Farm Loans

A Guaranteed Farm loan is provided to farmers and ranchers who do not meet the qualification requirements of a commercial lender. This includes any bank, farm credit system institution or credit union. The program provides a loan guarantee of up to 95 percent of the loan amount made and allows lenders to ease some of their requirements to let a farmer or rancher have access to funding.

Socially Disadvantaged Farmers and Ranchers Loans

Socially Disadvantaged Farmers and Ranchers loans are available to members of racial minority and other socially disadvantaged groups. 

These loans allow these individuals to operate family-sized farms and ranches.
Qualifying members considered for these loans include women, African-Americans, American Indians, Alaskan Natives, Hispanic-Americans and Latinos, Asian-Americans and Pacific Islanders.