Agriculture Secretary Tom Vilsack announced several changes to USDA FSA Farm Loan Programs earlier this week. The changes come immediately as a result of passage of the 2014 Farm Bill.
Changes that will take effect immediately include:
- Elimination of loan term limits for guaranteed operating loans.
- Modification of the definition of beginning farmer, using the average farm size for the county as a qualifier instead of the median farm size.
- Modification of the Joint Financing Direct Farm Ownership Interest Rate to 2 percent less than regular Direct Farm Ownership rate, with a floor of 2.5 percent. Previously, the rate was established at 5 percent.
- Increase of the maximum loan amount for Direct Farm Ownership down payments from $225,000 to $300,000.
- Elimination of rural residency requirement for Youth Loans, allowing urban youth to benefit.
- Debt forgiveness on Youth Loans, which will not prevent borrowers from obtaining additional loans from the federal government.
- Increase of the guarantee amount on Conservation Loans from 75 to 80 percent and 90 percent for socially disadvantaged borrowers and beginning farmers.
- Microloans will not count toward loan term limits for veterans and beginning farmers.
- Additional modifications must be implemented through the rulemaking processes.
“Our nation’s farmers and ranchers are the engine of the rural economy. These improvements to our Farm Loan Programs will help a new generation begin farming and grow existing farm operations,” said Vilsack.
“(This) announcement represents just one part of a series of investments the new Farm Bill makes in the next generation of agriculture, which is critical to economic growth in communities across the country.”