FARM LOAN PROGRAMS
A loan made to an eligible applicant to assist with the financial costs of operating a farm. Maximum loan amount is $300,000. A percentage of direct operating loan funds are targeted for beginning farmers
and socially disadvantaged applicants
Microloans are direct farm operating loans with a shortened application process and reduced paperwork designed to meet the needs of smaller, non-traditional, and niche type operations. Apprentice and mentorship programs, non-farm business experience, and farm labor experience are acceptable alternative solutions for helping to meet farm experience and managerial requirements. Maximum loan amount is $50,000.
Direct Farm Ownership Down Payment Loan
FSA has a special loan program to assist socially disadvantaged
and beginning farmers
in purchasing a farm. Retiring farmers may use this program to transfer their land to future generations.
- The applicant must make a cash down payment of at least 5 percent of the purchase price.
- The maximum loan amount does not exceed 45 percent of the lesser of (a) the purchase price of the farm or ranch to be acquired; (b) the appraised value of the farm or ranch to be acquired; or (c) $667,000 (Note: This results in a maximum loan amount of $300,000).
- The term of the loan is 20 years. The interest rate is 4 percent below the direct FO rate, but not lower than 1.5 percent.
- The remaining balance may be obtained from a commercial lender or private party. FSA can provide up to a 95 percent guarantee if financing is obtained from a commercial lender. Participating lenders do not have to pay a guarantee fee.
- Financing from participating lenders must have an amortization period of at least 30 years and cannot have a balloon payment due within the first 20 years of the loan.
A loan made to eligible applicants to purchase, enlarge, or make capital improvements to family farms, or to promote soil and water conservation and protection. Maximum loan amount is $300,000. A percentage of direct farm ownership loan funds are targeted for beginning farmers
and socially disadvantaged applicants
Loans are available to eligible applicants who have incurred substantial financial losses from a disaster. Maximum outstanding loan amount is $500,000.
Provide operating type loans to eligible rural youth applicants to finance a modest income-producing agricultural project. Maximum loan amount is $5,000.
A loan made by another lender and guaranteed by FSA to eligible applicants to purchase, enlarge, or make capital improvements to family farms, or to promote soil and water conservation and protection. A percentage of guaranteed farm ownership loan funds are targeted for beginning
and socially disadvantaged
for more information on guaranteed loans.
Access the 2-FLP Handbook
(scroll down to find the select the handbook from the list).
A loan made by another lender and guaranteed by FSA to an eligible applicant to assist with the financial costs of operating a farm. A percentage of guaranteed operating loan funds are targeted for beginning
and socially disadvantaged farmers
for more information on guaranteed loans.
Guarantees will be offered to the owner of a farm who wishes to sell real estate through a land contract to a beginning farmer
or a farmer who is a member of a socially disadvantaged
group. Guarantees can be used for financing the purchase of a farm with a purchase price up to $500,000 on a new land contract. FSA offers two types of guarantees under this program. The seller may request either of the following:
Prompt Payment Guarantee: A guarantee of up to the amount of three amortized annual installments plus the cost of any related real estate taxes and insurance; or
Standard Guarantee: A guarantee of 90 percent of the outstanding principal balance under the land contract.
Contract Guarantee Program
USDA may make loans to producers to build or upgrade farm storage and handling facilities. Commodities covered under this storage program are rice, soybeans, dry peas, lentils, small chickpeas, peanuts, sunflower seeds, canola, rapeseed, safflower, flaxseed, mustard seed, and other oilseeds as CCC determines and announces. Corn, grain sorghum, oats, wheat, or barley harvested as whole grain or other than whole grain are also eligible.
Biomass Crop Assistance Program (BCAP) provides financial assistance to producers or entities that deliver eligible biomass material to designated biomass conversion facilities for use as heat, power, biobased products or biofuels. Initial assistance will be for the Collection, Harvest, Storage and Transportation (CHST) costs associated with the delivery of eligible materials.
Provides a voluntary program to agricultural producers to help them safeguard environmentally sensitive land. Producers enrolled in CRP plant long-term, resource-conserving covers to improve the quality of water, control soil erosion, and enhance wildlife habitat. In return, CCC provides participants rental payments and cost-share assistance. Contract duration is between 10 and 15 years. CRP was authorized by section 1231 of the Food Security Act of 1985, as amended (Pub. L. 99-198)(16 U.S.C. 3831, et seq.).
For more information on the Nebraska SAFE, contact your local FSA office.
The Central Basins CREP was terminated on December 31, 2012. All existing CREP contract will remain in effect.
- Platte-Republican Resources CREP
Provides emergency funding for farmers and ranchers to rehabilitate farmland damaged by wind erosion, floods, hurricanes, or other natural disasters, and for carrying out emergency water conservation measures during periods of severe drought. The natural disaster must create new conservation problems, which, if not treated, would: impair or endanger the land; materially affect the productive capacity of the land; represent unusual damage which, except for wind erosion, is not the type likely to recur frequently in the same area; and be so costly to repair that Federal assistance is, or will be, required to return the land to productive agricultural use. Authorized by section 401 of the Agricultural Credit Act of 1978 (Pub. L. 95-334) (16 U.S.C. 2201 et seq.).
GRP is voluntary, and it offers landowners the opportunity to protect, restore, and enhance grasslands on their property. Section 2401 of the Farm Security and Rural Investment Act of 2002 (Pub. L. 107-171) added section 1238N to the Food Security Act of 1985 (16 U.S.C. 3838n) to authorize this program. USDA’s NRCS, FSA, and Forest Service are coordinating GRP implementation. The program will conserve vulnerable grasslands from conversion to cropland or other uses and conserve valuable grasslands by helping maintain viable ranching operations.
Farmland Wetlands Program is a voluntary program to restore up to one million acres of U.S. farmable wetlands and associated buffers by improving the lands hydrology and vegetation. Eligible producers can enroll eligible land in FWP through the Conservation Reserve Program (CRP). The FWP is a helpful tool for producers to help protect clean water, control soil erosion and enhance wildlife habitats.
The Food, Conservation and Energy Act of 2008 authorized FWP through September 30, 2012 for the enrollment of the following:
- Certain cropped wetlands and associated buffers
- Land devoted to constructed wetlands and associated buffers
- Land devoted to certain commercial pond-raised aquaculture
- Land subject to the natural overflow of a prairie wetland (Flooded prairie wetland) and associated buffers.
Practices that are authorized for continuous signup enrollment into CRP under FWP are:
- CP27, FWP Cropped Wetland
- CP39, FWP Constructed Wetland
- CP40, FWP Aquaculture Wetland Restoration
- CP41, FWP Flooded Prairie Wetland
Payment Eligibility/Payment Limitation
To be eligible for most FSA program benefits, certain payment eligibility requirements must be met. These include actively engaged in farming, cash rent tenant, substantive change, and commensurate share requirements. Participants are responsible for notifying county offices of any changes in their farming operation from previous years. Entities earning program benefits subject to a limitation must provide FSA the names, addresses, and tax identification numbers of all members.
FSA programs are subject to specific payment limitations and Adjusted Gross Income (AGI) requirements. Payment eligibility and payment limitation rules are outlined at 7 CFR Part 1400.
Producers participating in most FSA programs are required to report all acres to be eligible for benefits. All cropland and non-cropland acres should be reported, as well as initial, failed, prevented planted and subsequently planted crops. Producers are encouraged to report crops timely. If acres are reported after the applicable acreage reporting deadline, a late-filed report may be accepted. A field visit must be conducted to verify the crop and late file fees will be assessed.
The Direct and Counter-Cyclical Payment Program (DCP) provides payments to eligible producers on farms that are annually enrolled for the 2013 crop year. There are two types of DCP payments - direct payments and counter-cyclical payments. Both are calculated using the base acres and payment yields established for the farm. DCP was previously authorized by the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill) and has been extended by the American Taxpayer Relief Act of 2012. Regulations covering the Direct and Counter-cyclical program are located at 7 CFR 1412.
The ACRE option is an alternative method of replacing the Counter-Cyclical portion of the DCP program. ACRE benefits are based on the planted crops revenue (price X production) while the Counter-Cyclical payments are based on the price alone. ACRE payments are revenue based and tied to crop production, at the state and farm level, as well as the National Average Market Price for the planted crop. By enrolling a farm into the ACRE option, producers are agreeing to reduce their DCP direct payments by 20 percent, reduce their loan rate by 30 percent and not receive Counter-Cyclical payments. All participants will have the opportunity to elect into or out of ACRE for the 2013 program year
Provide producers interim financing at harvest time to meet cash flow needs without having to sell their commodities when market prices are typically at harvest-time lows. Allowing producers to store production at harvest facilitates more orderly marketing of commodities throughout the year. Marketing assistance loans for covered commodities are nonrecourse because the commodities are pledged as loan collateral and producers have the option of delivering the pledged collateral to CCC as full payment for the loan at maturity.
A producer who is eligible to obtain a loan, but who agrees to forgo the loan, may obtain an LDP. The LDP rate equals the amount by which the applicable loan rate where the commodity is stored exceeds the alternative loan repayment rate for the respective commodity.
The Supplemental Revenue Assistance (SURE) program provides benefits for crop losses due to natural disasters. This program is revenue based, and considers losses in both production quantity and quality, as well as price. Prior crop disaster programs dealt only with production losses and did not account for decreases in revenue. SURE was authorized by the 2008 Farm Bill and is legislated through 2011.
For the SURE program, a producer’s “farm” includes all acres of all crops in all counties. To be eligible, a producer must have at least a 10% production loss on a crop of economic significance if part of their “farm” is located within a Secretarial declared disaster county, or a contiguous county. Producers whose farming operations lie outside of these counties must have suffered at least a 50% loss of actual production.
SURE has a Risk Management Purchase Requirement (RMPR) which means that in order to receive benefits, all crops of economic significance must have been covered by a crop insurance policy or through the Non-insurable Crop Disaster Assistance Program (NAP).
Provides financial assistance to eligible producers affected by drought, flood, hurricane, or other natural disasters. This federally funded program covers noninsurable crop losses and planting prevented by disasters. Producers who are landowners, tenants, or sharecroppers who share in the risk of producing an eligible crop are eligible. Eligible crops include commercial crops and other agricultural commodities produced for food (including livestock feed) or fiber for which the catastrophic level of crop insurance is unavailable. Also eligible for NAP coverage are controlled-environment crops (mushrooms and floriculture), specialty crops (honey and maple sap), and value loss crops (aquaculture, Christmas trees, ginseng, ornamental nursery, and turfgrass sod). Authorized by section 196 of the Agricultural Market Transition Act (Pub. L. 104-127) (7 U.S.C. 7333), as amended.
This program provides financial assistance to eligible livestock producers who suffered grazing losses due to a qualifying drought or fire on federally managed lands after January 1, 2008, and before October 1, 2011, during the calendar year in which the loss occurs. For drought, the losses must have occurred on land that is native or improved pastureland with permanent vegetative cover or a forage or small grain crop planted specifically for grazing for covered livestock due to a qualifying drought during the normal grazing period for the specific type of grazing land in the county. For fire, LFP provides payments to eligible livestock producers that have suffered grazing losses on rangeland managed by a federal agency if the eligible livestock producer is prohibited by the federal agency from grazing the normal permitted livestock on the managed rangeland due to a qualifying fire.
Eligible livestock under LFP include beef cattle, alpacas, buffalo, beefalo, dairy cattle, deer, elk, emus, equine, goats, llamas, poultry, reindeer, sheep and swine. For losses due to drought, qualifying drought ratings are determined using the U.S. Drought Monitor located at http://droughtmonitor.unl.edu/.
The Livestock Indemnity Program issued regulations at 7 CFR Part 760 will provide a payment to livestock producers with a farming/ranching interest who incurred eligible livestock death losses due to adverse weather events on or after January 1, 2008 through October 1, 2011. The sign up for the UDSA Farm Service Agency’s (FSA) Livestock Indemnity Program (LIP) started on July 13, 2009.
Losses because of adverse weather events, such as blizzards, tornado, lightning, extreme cold, extreme heat, and wildfires, will be eligible for LIP. Producers who suffer livestock losses due to adverse weather that exceed normal mortality will be required to provide documentation of the livestock lost.
To qualify for LIP, producers need to be aware of the following signup dates:
- Producers that suffered livestock losses in the 2008 calendar year have until September 13, 2009 to file notice of loss and application for payment for LIP at their local FSA Office.
- Producers suffering losses from January 1, 2009 to July 13, 2009, must file a loss application by September 13, 2009. The final date to submit an application for payment for 2009 losses is January 30, 2010.
- For livestock losses that occur after July 13, 2009, producers will have 30 days after the death to file a notice of loss at FSA and will have until January 30, of the next calendar year to apply for payment.
Adequate documentation must prove the death of eligible livestock occurred as a direct result of an eligible adverse weather event in the calendar year for which benefits are being requested. If adequate verifiable proof of death records documentation is not available, a livestock producer may provide reliable records, along with verifiable beginning and ending inventory, as proof of death.
Certifications of livestock deaths by third parties, who are not affiliated with the farming operation, may be accepted only if verifiable records or reliable proof of death records are not available. Verifiable beginning and ending inventory records are still required.
Eligible Livestock are as follows:
- Adult/non-adult beef cattle
- Adult/non-adult dairy cattle
- Adult/non-adult buffalo/beefalo
- Equine maintained for commercial use as part of the farming operation
The program is designed to aid in the reduction of losses not covered under the Supplemental Revenue Assistance Program (SURE), Livestock Indemnity Program (LIP), Tree Assistance Program (TAP) and the Livestock Forage Program (LFP). Eligible producer of livestock that would normally be grazing, honey bees, and farm-raised fish may receive assistance for losses that occur on or after January 1, 2008 and before October 1, 2011 resulting from an eligible loss event. Producers may receive assistance for grazing losses, feed losses, additional feed costs, and death losses of honeybees and farm-raised fish.
Producers must file a notice of loss within 30 days after the loss event. The ELAP application and all supporting documentation must be filed no later than January 30 of the year following the year of loss.
A loan available to Indian tribes for purchasing privately held lands within their respective reservations boundaries. The statutory authority for Indian Tribal Land Acquisition loans is Pub. L. 91-229 (25 U.S.C 490).
Agriculture Mediation Program
Helps agricultural producers, their lenders, and other persons directly affected by the actions of USDA resolve disputes. Through mediation, a trained, impartial person (mediator) helps participants review their conflicts, identify options, and agree on solutions. Mediation is a valuable tool for settling disputes in many different USDA program areas. These include farm loans, farm and conservation programs, wetland determinations, rural water loan programs, grazing on national forest system lands, and pesticides usage. The program is authorized through 2005 by the Agricultural Credit Act of 1987 (Pub. L. 100-233) (7 U.S.C. 5101 (5104), as amended by the Grain Standards and Warehouse Improvement Act of 2000 (Pub. L. 106-372).