Agricultural Rural Loans

The Farm Service Agency (FSA) of the United States Department of Agriculture provides direct and guaranteed loans to farmers and ranchers to enhance, build, and preserve family farms for a flourishing agricultural economy. The Direct Loan Program offers farm ownership, operational, and emergency loans. The Guaranteed Loan Program provides financing for farm ownership, operation, and sustainability. Under the Land Contract Guarantee Program, the FSA provides two types of guarantees. The Farm Service Agency's farm loan programs aim to assist farmers and ranchers in obtaining commercial financing. Our purpose of delivering temporary, regulated credit is fulfilled if you can acquire credit from a commercial lender.

Direct Loans

The FSA's Direct Loan Program is intended to assist farmers in starting, purchasing, or expanding their farming operations. FSA offers various loans that can provide additional funds farmers require to create and sustain profitable farming operations, ranging from beginning farmers with insufficient financial history to meet the criteria for commercial credit to farmers who have experienced financial challenges due to natural calamities. Farmers can apply for direct loans at FSA offices near them.

Guaranteed Farm Loans

Farmers who do not satisfy the loan requirements of a commercial lender can apply for FSA-guaranteed loans. Commercial lenders, such as banks, Farm Credit System institutions, or credit unions make and service guaranteed loans. A commercial lender makes and services a guaranteed loan, and the FSA guarantees it against loss up to a maximum of 90% in most cases, or 95% in specified circumstances. The FSA approves acceptable loan guarantees and monitors lenders' actions. For a list of cooperating lenders, contact your local FSA office.

Farm Ownership Loans

Farm Ownership Loans can be used to buy a farm, expand an existing farm, build new farm buildings and/or upgrade existing facilities, pay closing expenses, and promote soil and water conservation and protection. Direct loans are offered up to $600,000 in total. There are also microloans accessible. The FSA will guarantee farm ownership loans up to $1,776,000 through a commercial leader. For both direct and guaranteed farm ownership loans, the maximum repayment term is 40 years.

Farm Operating Loans

Farm Operating Loans can be used to cover regular operating expenses, machinery and equipment, minor real estate repairs or renovations, and debt refinancing. The direct loans have a maximum lending amount of $400,000. There are also microloans accessible. The FSA will guarantee agricultural operations loans up to $1,776,000 through a commercial leader. The repayment period can vary, but it cannot be longer than seven years.

Annual operational loans are typically repaid within a year of the items produced being sold. Direct operational loans require candidates to have sufficient education, training, or at least one year of experience managing or functioning a farm or ranch in the previous five years.

Down Payment Assistance Program: The Down Payment Loan aids low-income and first-time farmers in purchasing a farm.

  • The candidate should make a cash down payment of at least 5% of the purchase cost.
  • The maximum loan amount cannot exceed % of the lesser of the purchase cost of the farm to be procured, the appraised value of the farm to be obtained, or $667,000 (Note: This outcome in a maximum loan amount $300,150).
  • The loan has a maximum length of 20 years.
  • The interest rate is 4% less than the direct farm ownership rate but not less than 1.5 percent.
  • The remaining amount can be secured through a commercial lender or a private party. If finance is obtained from a commercial lender, the FSA can issue a 95% guarantee. A guarantee fee is not required of participating lenders.
  • Participating lender financing must have a minimum amortization length of 30 years and cannot include a balloon payment due within the first 20 years of the loan.

Youth Loans for Agriculture-related organization

Youth loans are available to young people sponsored by a project supervisor, such as a 4-H club, FFA, tribal youth organization, or other agriculture-related organization. The initiative must give the young person the possibility to get education and experience in agriculturally based abilities. These loans are only accessible as direct loans with a $5,000 maximum loan amount. Youth loans are available to those aged 10 to 20 years old at the time of loan closing.

Emergency Loans For Agriculture Uses

Farmers and ranchers who have sustained losses due to natural catastrophes that have harmed their agricultural or ranching operations are eligible for emergency loans. Emergency loan money can be used to rehabilitate or replace important property, cover all or part of the production costs related to the catastrophe year, cover essential family living expenditures, reorganize the farming operation, and refinance specific debts.

The farm's county or counties must be declared a disaster region by the President or recognized by the Secretary of Agriculture. Applicants for production loss loans must show a 30% loss in a single farming operation. Applicants may be eligible for loans covering up to 100 percent of their production or physical losses. These loans are only accessible from the FSA as direct loans with a maximum amount of $500,000.

Conservation Loans For Rural Land Uses

Farmers and ranchers who want to adopt conservation strategies on their land can get credit through Conservation Loans. These loans are offered to both smaller, less financially stable farmers and ranchers and more significant, more financially established farmers and ranchers. The family farm and credit test criteria do not apply to Conservation Loans.

Farmers and ranchers can use conservation loans to execute any conservation work part of a USDA-approved conservation plan or Forestry Management Plan. The maximum loan amount is $1,776,000, with a 30-year repayment term. Conservation Loans are only provided in the form of guaranteed loans.

Loans for Beginners and Socially Disadvantaged Farmers

Congress allocates a percentage of farm ownership and farm operation loan monies to the beginning and socially disadvantaged farmers each year. Providing credit programs is critical since these farmer groups have historically had more difficulty obtaining financial help.

The FSA has several financing programs to help beginning and socially disadvantaged farmers (refer to the fact sheets titled Loans for Socially Disadvantaged Farmers and Ranchers and Loans for Beginning Farmers and Ranchers). The FSA Down Payment Program offers a maximum loan amount of $300,150 to assist socially disadvantaged and starting farmers in purchasing a farm.