Beginning Farmers and Ranchers Loans

America's next generation of farmers and ranchers are supported through FSA's "Beginning Farmer" direct and guaranteed loan programs. Farm Ownership loans can provide access to land and capital. Operating loans can assist beginning farmers in become prosperous and competitive by helping to pay normal operating or family living expenses; open doors to new markets and marketing opportunities; assist with diversifying operations; and so much more. Through the Microloan programs, beginning farmers and ranchers have an important source of financial assistance during the start-up years.

While FSA is fully committed to all farmers and ranchers, there is a special focus on the particular credit needs of farmers and ranchers who are in their first 10 years of operation. Each year, FSA targets a portion of its lending by setting aside a portion of all loan funds for financing beginning farmer and rancher operations. With the single exception of the Direct Farm Ownership Down Payment Loan, the Beginning Farmer classification is not related to a type of loan program; it references a specific, targeted funding source.

*Loan application forms for Beginning Farmers are the same as those used by non-beginning farmer applicants. Please select the applicable loan type for applicable Farm Loan application forms.

Simultaneous requests for a direct farm ownership loan and a direct operating loan should be combined on a single application form.

When you meet with your FSA county Farm Loan Program staff, you may be asked to complete additional forms based on applicable loan program requirements for the loan type.

Beginning Farmer and Rancher Frequently Asked Questions

Beginning Farmer Definition

A beginning farmer is defined as one who:

  • Has not operated a farm or ranch for more than 10 years
  • Does not own a farm or ranch greater than 30 percent of the average size farm in the county as determined by the most current Census for Agriculture at the time the loan application is submitted
  • Meets the loan eligibility requirements of the program to which he/she is applying - Farm Operating Loan, Farm Ownership Loan, or Microloan
  • Substantially participates in the operation

Farm Acreage Limitations

Here is an example:

Let's say the average size farm for "ABC County" is 94 acres. 30 percent of the average, rounded to the nearest tenth, is 28.2 acres. So, to meet the beginning farmer requirement, a loan applicant may not own more than 28.2 acres when the loan application is submitted.

If the farm crosses county lines and is located in more than 1 county, "ABC County" and "XYZ County," FSA uses the average size farm data for the county where the loan applicant lives. If the loan applicant's house is not located on the farm, then the Agency looks to the data for the county in which the largest portion of the farm is located.

If you are a member of an historically underserved group or a woman farmer, the farm acreage limitation does not apply.

Down Payment Loan

Being a beginning farmer is one of the requirements to be eligibility for the Direct Farm Ownership Down Payment Loan. Down Payment loan funds may be used only to partially finance the purchase of a family farm. Loan applicants must contribute a minimum downpayment of 5 percent of the purchase price of the farm and the Agency will finance 45 percent to a maximum loan amount of $300,015. The balance of the purchase price not covered by the down payment loan and the loan applicant's down payment may be financed by a commercial lender (pdf, 563KB), private lender, a cooperative, or the seller.

Additional Information

We encourage you to contact your local office or USDA Service Center to learn more about our programs. You also should be able to find a listing in the telephone directory in the section set aside for governmental/public organizations under the U.S. Department of Agriculture, Farm Service Agency. Our local FSA office staffs are happy to help you.