> Farm Ownership Loans (Direct and Guaranteed)
The Farm Service Agency (FSA) makes farm ownership (FO) loans to farmers and ranchers who temporarily cannot obtain a loan from a bank, Farm Credit System institution, or other lender due to disaster and financial hardship. FSA also makes loans to beginning farmers. FO loans can be used to purchase a farm or ranch; construct buildings or make other real estate improvements; promote soil and water conservation; and pay loan closing costs. Both "guaranteed" and "direct" loans are available through this program.
Under the guaranteed loan program, conventional lenders (banks, Farm Credit System institutions, and other lenders) make the loan, and FSA guarantees it for up to 95 percent of the loss of principal and interest. The maximum FSA guaranteed FO loan is $1,214,000. Your lender can tell you if a guarantee is the right loan for you.
Applicants who are unable to qualify for a guaranteed loan may be eligible for a direct loan from FSA. Direct loans are made and serviced by FSA officials using Government funds. FSA provides direct loan customers with supervision and credit counseling so that they have a greater chance to be successful. The maximum direct FO loan is $300,000.
General Program Requirements:
To be eligible for a farm ownership loan from the Farm Service Agency (FSA), you must:
- Be a U.S. citizen or permanent resident
- Not be delinquent on a Federal debt
- Not have caused a loss to the Government by having a previous FSA debt forgiven
- Not have a poor history of repaying debts
- Not have any controlled substances convictions
- Own and operate a "family-sized" farm when the loan is closed (see our Glossary Terms for a definition of family-size farm)
- Not have any outstanding judgments against you
- Be unable to obtain credit elsewhere.
Applicants must have enough money to repay the loan and enough collateral to fully secure it. Other eligibility criteria apply and can be found on the Farm Service Agency website or by contacting FSA directly.
Loan repayment periods for both direct and guaranteed farm ownership loans cannot exceed 40 years. Interest rates for direct farm ownership loans are dependent upon the Government's cost of funds. FSA offers lower resource interest rates to applicants who cannot afford the agency's regular interest rate. Rates for guaranteed farm ownership loans are negotiated by the lender and farmer. However, the lender must not charge guaranteed loan customers a higher interest rate than what they charge their average farm loan customer. For most guaranteed loans, FSA charges an origination fee equal to one percent of the guarantee.
To apply for a direct farm ownership loan, you submit an application form (FSA-2001) and business plan, in addition to other forms required to determine eligibility.
To apply for a guaranteed loan, visit your lender, who will arrange for the guarantee.
Program Contact Information:
For more information, visit:
You may also obtain information through your local FSA office or the United States Department of Agriculture (USDA) service center. To locate the office nearest you, visit:
U.S. Department of Agriculture