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Nebraska Farm Service Agency

Nebraska Farm Service Agency. Rich Barta Farm Loan Chief Lincoln, NE 402-437-5887. Types of Loans. Direct farm ownership loans (FO) and farm operating loans (OL) are made by FSA working directly with the loan applicants.

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Nebraska Farm Service Agency

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  1. Nebraska Farm Service Agency Rich Barta Farm Loan Chief Lincoln, NE 402-437-5887

  2. Types of Loans • Direct farm ownership loans (FO) and farm operating loans (OL) are made by FSA working directly with the loan applicants. • Guaranteed FO and OL loans are originated by the lender and then submitted to FSA for consideration of a guarantee. Typically, FSA guarantees 90 or 95 percent of a loan against the loss of principal and interest that might be incurred if the loan fails.

  3. Use of Loan Funds • OL loans may be used to purchase livestock, poultry, farm equipment, feed, seed, fuel, fertilizer, chemicals, insurance, and other operating expenses. Funds also may be used to refinance debt (subject to certain restrictions) and to install or improve water systems for home use, livestock or irrigation, and other improvements • FO loans may be used to purchase or enlarge a farm or ranch, purchase easements or rights of way needed in the farm's operation, erect or improve buildings, implement soil and water conservation measures, and pay closing costs. Direct FO loan funds can only be used to purchase a farm or ranch. Guaranteed FO funds may also be used to refinance debt.

  4. Maximum Loan Amounts • Maximum amounts of indebtedness are: • Direct FO $300,000 • Direct OL $300,000 • Combined Guaranteed FO or OL: $1,094,000 (Amount varies annually based on inflation).

  5. Eligibility Requirements • To qualify for assistance, applicants must meet all loan eligibility requirements including: • Be an owner-operator or tenant-operator of a not larger then a family-size farm; • Be unable to obtain credit elsewhere at reasonable rates and terms to meet actual needs • For direct loans, have sufficient education; training, or at least 1-year's experience in managing or operating a farm or ranch. For direct FO loans, applicants must have participated in the business operations of a farm or ranch for 3 years; • Agree to participate in borrower training if required

  6. Eligibility Requirements-Continued • Apply as an individual or an acceptable entity. • Have a satisfactory history of meeting credit obligations; • Possess legal capacity to incur loan obligations; • Be within the time restrictions as to the number of years they can receive FSA assistance. (7 years for Non Beginning farmer on D-OLs, 10 years for Beginning farmers on D-OLs and 10 years for all D-FOs)

  7. Eligibility Requirements-Continued • No convictions for controlled substances • No Federal Crop Insurance violations • Be a citizen • Not be delinquent on a Federal debt; • Not have caused FSA a loss by receiving debt forgiveness (certain exceptions apply)

  8. Terms and Interest Rates • Repayment terms for OL loans depend on the collateral securing the loan and usually run from 1 to 7 years. Repayment terms for FO loans vary but never exceed 40 years. • Interest rates for direct loans are set periodically according to the Government's cost of borrowing. • Interest rates for guaranteed loans are established by the lender, but may not exceed the rate the lender charges its average farm loan customer.

  9. Interest Rates for Direct Loans • Effective as of May 1, 2009 • Farm Operating- Direct Full rate 2.375% Limited Resource-5.00% • Farm Ownership- Direct Full rate 4.25% Limited Resource -5.00% • Farm Ownership- Direct, Joint Financing 5.00% • Farm Ownership- Direct Down Payment, Beginning Farmer/Rancher 1.50%

  10. Down Payment Farm Ownership Loan Program • FSA has a special down payment FO loan program to assist Beginning or Socially Disadvantaged (SDA) Farmers and Ranchers to purchase a farm or ranch. This program provides a means for retiring farmers and ranchers to transfer their land to the future generation.

  11. Down Payment Farm Ownership Loan Program-Continued • To qualify: • Must be a Beginning or SDA Farmer and Rancher:A beginning farmer or rancher is an individual or entity who (1) has not operated a farm or ranch for more than 10 years; (2) meets the loan eligibility requirements of the program to which he/she is applying; (3) substantially participates in the operation; and, (4) for FO loan purposes, does not own a farm greater than 30 percent of the medium size farm in the county. (Note: all applicants for direct FO loans must have participated in business operation of a farm for at least 3 years.) If the applicant is an entity, all members must be related by blood or marriage, and all stockholders in a corporation must be eligible beginning farmer or an SDA

  12. Down Payment Farm Ownership Loan Program-Continued • An applicant must make a cash down payment of at least 5 percent of the purchase price. • FSA may provide a maximum amount equal to 45 percent of the purchase price or appraised value, whichever is less. The term of the loan is 20 years at a fixed interest rate of 1.50 percent. as of 5-1-09) • 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. • The maximum amount of the FSA loan is $225,000.

  13. Joint Financing Plan • Beginning farmer or rancher applicants may choose to participate in a joint financing plan that is also available to other applicants. In this program, FSA lends up to 50 percent of the amount financed, and another lender provides 50 percent or more. FSA will charge a reduced interest rate on the loan.

  14. Where to Apply • Applications for direct loan assistance may be submitted to the FSA local office serving the area where the operation is located. Local FSA offices are listed in the telephone directory under U.S. Government, Department of Agriculture, and Farm Service Agency. For guaranteed loans, applicants must apply to a commercial lender who participates in the Guaranteed Loan Program. Local FSA offices have lists of participating lenders.

  15. Obtaining forms • FSA forms can be obtained from a local FSA office or a USDA Service Center, or they can be downloaded and printed from FSA's Web site: http://www.fsa.usda.gov/dafl/forms%20list.htm. • Also, many forms can be filled out and submitted via USDA's "eForms" Web site located at: http://forms.sc.egov.usda.gov/eforms/mainservlet.

  16. 100 Beef Cow and 100 Acre program • Objective – This program will provide the education, skills, financial incentives, and credit to get them started. The student will enter into a written agreement with an existing farmer or rancher where the students’ labor may be traded for use of machinery, livestock facilities, feed, land use, etc. and the student becomes an owner of assets such as beef cow, equipment, etc. The written agreement will be as flexible as the owner and student want it to be. The end result is for the student to become the owner of farm and/or ranch assets that can be built on over the years into a full time farming/ranching operation.

  17. 100 Beef Cow and 100 Acre program-continued • Partners-Nebraska College of Technical Agriculture (NCTA) at Curtis, Nebraska, the Nebraska Department of Agriculture (NDA), and Farm Service Agency (FSA).

  18. 100 Beef Cow and 100 Acre program-Continued • Contributions by Nebraska College of Technical Agriculture – NCTA willprovide a course of study designed around the 100 Beef Cow program. There will be classes on the latest techniques in agriculture, course work on developing a written agreement between the owner and the student, course work on developing a business plan, and course work on how to prepare an application to apply for FSA credit.

  19. 100 Beef Cow and 100 Acre program-continued • Contributions by the Nebraska Department of Agriculture (NDA), through the beginning farmer program will provide guidance and financial assistance through tax credits to the owner. NDA is able to offer 10% to 15% tax credits to the owner if they rent to a beginning farmer and will assist the student in being able to rent land resources.

  20. 100 Beef Cow and 100 Acre program-Continued • Contributions by the Farm Service Agency – FSA will provide direct and guaranteed loans to the students that qualify. To be eligible, the students must meet all of the requirements of the direct or guaranteed handbooks. The education received should enable them to meet the education or experience criteria for direct operating loans and guaranteed loans. FSA Nebraska employees will provide training to the staff of NTCS which will then allow them to instruct the student on how to complete an application for loans from FSA.

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