Farm Service AGency (FSA) makes direct and guaranteed farm ownership (FO) and operating loans (OL) to family-size farmers and ranchers who cannot obtain commercial credit.  FSA also makes loans to individual rural youth to establish and operate income producing projects of modest size in connection with 4-H clubs, FFA, and similar organizations.  FSA also provides emergency loans to help farm producers recover from production and physical losses due to drought, flooding, and other natural disasters.  Information on farm loan programs of the Farm Service Agency may be obtained from the
county USDA/FSA service centers located throughout the state and also on the FSA website at www.fsa.usda.gov.

FSA farm loan program asssistance is available to eligible applicants who:

• Are unable to obtain conventional credit,
• Will be the owner or renter of a no larger than a family sized farm,
• Have sufficient training and/or experience in managing and operating a farm,
• Are citizens or lawfully admitted aliens,
• Show  repayment ability for the requested loan,
• Show sufficient security for the requested loan,
• Other eligibility requirements apply to certain loan types.

"Direct" Farm Loans are made by FSA with government funds.  The local county office makes and services these loans and provides direct loan customers with supervision and credit counseling so they have a better chance of success.  Farm Ownership, Operating, Emergency, and Youth loans are the main types of loans available under the Direct Loan program.

FSA "Guaranteed" Farm loans provide lenders (i.e., banks, credit unions, Farm Credit institutions) with a guarantee of up to 95% of the loss of principle and interest on a loan.  Farmers and ranchers apply to an agricultural lender, which then arranges for the guarantee.  FSA can guarantee Operating Loans or Farm Ownership up to $949,000 (amount adjusted annually based on inflation).

Direct Farm Ownership Loans:  With a Direct Farm Ownership Loan (FO), you can purchase farmland, construct or repair buildings and other fixtures, and promote soil and water conservation.  The maximum amount for Direct Farm Ownership Loans is $200,000.  Repayment terms and interest rates vary according to the type of loans made, the collateral securing the loans, and the applicants ability to repay.  Farm Ownership Loan terms cannot exceed 40 years.

Direct Operating Loans:  Direct Operating Loans (OL) may be used to purchase items such as livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance, and other operating expenses.  Operating Loans can also be used to pay for minor improvements to building, costs associated with land and water development, family subsistence, and/or refinance debts under certain circumstances.  The maximum amount of Direct Operating Loans is $200,000.  Repayment terms and interest rates vary according to the type of loan made, the collateral securing the loans, and the applicants ability to repay.  Annual Operating Loans are normally repaid within one year.  Other Operating Loans are normally repaid within seven years.

Youth Loans:  Available for individual rural youth (city and town under 10,000 population) ages 10 through 20 to establish and operate income producing projects.  Applicants must be participating in a 4-H, FFA or similar type of organization and be recommended by an advisor and by parent(s).  Maximum loan is $5,000.  Payment schedule will vary depending on the project.

Emergency Loans:  FSA provides Emergency Loans (EM) to help producers recover from production and physical losses due to drought, flooding, other natural disasters, or quarantine.  Emergency loan funds may be used to restore or replace essential property, pay all or part of production costs associated with the disaster year, pay essential family living expenses, reorganize the farming operation, and refinance certain debts.

Emergency Loans may be made to farmers or ranchers who:

• Own or operate land located in a county declared by the president as a disaster area or designated by the Secretary of Agricluture as a disaster or quarantine area (for physical losses only, the FSA Administrator may authorize emergency loan assistance),
• Are established family farmer operators and have sufficient farming or ranching experience,
• Are citizens or permanent residents of the United States,
• Have suffered at least a 30 percent loss in crop production or physical loss to livestock, livestock products, real estate, or chattel property,
• Have an acceptable credit history,
• Are unable to receive credit from commercial sources,
• Can provide collateral to secure the loan,
• Have repayment ability.

Producers can borow up to 100 percent of actual production or physical losses, to a maximum amount of $500,000.  Repayment terms and interest rates vary according to the type of loan made, the collateral securing the loans, and the applicants ability to repay.

Guaranteed Farm Ownership Loans:  Guaranteed Farm Ownership Loans may be made to purchase farmland, construct or repair buildings and other fixtures, develop farmland to promote soil and water conservation, pay closing costs, or refinance debt.  Repayment terms vary according to the type of loan made, the collateral securing the loan, and the producers ability to repay.  The Farm Ownership loan cannot exceed 40 years.  The interest rate is negotiated between the lender and the borrower.  Interest rates on these loans may not exceed the rate charged for the lender's average farm customer.

Guaranteed Operating Loans:  Guaranteed Operating Loans (OL) may be used to purchase livestock, farm equipment, feed, seed, fuel, farm chemicals.  Operating Loans may also be used to pay for minor improvements to buildings, costs associated with land and water development, family living expenses, and to refinance debts under certain conditions.  Repayment terms vary according to the type of loan made, the collateral securing the loan, and the producers ability to repay.  The interest rate and payment terms are negotiated between the lender and the borrower.  Interest rates on these loans may not exceed the rate charged the lender's average farm customer.  In addition, under the Interest Assistance Program, FSA will subsidize four percent of the interest rate on loans to qualifying borrowers.

FSA can guarantee Operating Loans and Farm Ownership loans up to $949,000 (amount adjusted annually based on inflation).

Guaranteed Loans are the property and responsibility of the lender.  The lender makes the loan and services it to conclusion.  For most loans, the guarantee to the lender is 90 percent.  The guarantee percentage will be determined by FSA based on the risk involved in the loan.  The lender may receive a 95 percent guarantee when the purpose of the loan is to refinance a direct FSA Direct Loan Debt, or the loan is made to a Beginning Farmer to participate in the beginning farm down payment loan program.  Contact your local FSA office to get details on the Beginning Farm Down payment loan program.

Guaranteed Fee:  For most loans, FSA charges a guarantee fee of one percent of the guaranteed portion of the loan.  This fee may be passed to the borrower.  This guaranteed fee is waived for loans with interest assistance, loans where more than 50 percent of the loan funds are used to pay off FSA Direct Loan Debt, and Down Payment Farm Ownership Loans for Beginning Farmers.

Loan Fund Availability:  Farm Service Agency receives an allocation of loan funds each year based on congressional appropriations.  In any given fiscal year, loan funds can be limited and applicants may need to wait until the next appropriation to have their loans funded.

Loans for Socially Disadvantaged Persons:  FSA can make or guarantee loans to socially disadvantaged applicants.  Funds specifically for these loans are reserved each year.  A socially disadvantaged farmer or rancher is one of a group whose members have been subjected to racial, ethnic or gender prejudice because of their identity as members of the group without regard to their individual qualities.  Socially disadvantaged groups are women, African Americans, American Indians, Alaskan Natives, Hispanics, Asian Americans and Pacific Islanders.

Loans for Beginning Farmers and Ranchers:  FSA provides direct and guaranteed loans to beginning farmers and ranchers who are unable to obtain financing from commercial credit sources.  A beginning farmer or rancher is an individual or entity who (1) has not operated a farm or ranch for more than ten years; (2) meets loan eligibility requirements for the program to which he/she is applying; (3) substantially participates in the operation; and , (4) for farm ownership (FO) purposes, does not own a farm greater than 30 percent of the average in the county.  (Note:  all applicants for direct FO loans must have participated in business operations of a farm for at least three years.  FSA also has a special down payment FO program to assist beginning farmers and ranchers to purchase a farm or ranch.)

Contact: For further information on FSA Farm Loans Programs, contact your local FSA county office or look at FSA loan information via the Internet at www.fsa.usda.gov/dafl/default.htm.

You may also contact:
Farm Service Agency
ND State FSA Office
Attn:  Farm Loan Programs
1025 28th Street South
Fargo, ND 58103
701-239-5224
Fax: 701-239-5696