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USDA - Farm Service Agency Farm Loan Programs America’s Lender of First Opportunity!. United States Department of Agriculture (USDA) Farm Service Agency (FSA) Farm Loan Programs. America’s Lender of First Opportunity!. America’s Lender of First Opportunity!.

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USDA - Farm Service Agency

Farm Loan Programs

America’s Lender of First Opportunity!

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United States Department of Agriculture (USDA)

Farm Service Agency (FSA)

Farm Loan Programs

America’s Lender of First Opportunity!

america s lender of first opportunity
America’s Lender of First Opportunity!

FSA has been involved in agricultural lending for more than 70 years!

FSA offers loan and credit counseling assistance to farmers who want to own and operate their own farm

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Individualized farm and business planning expertise

America’s Lender of First Opportunity!

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Loan products tailored to your farming operation and needs

Loans at low interest rates and extended terms

America’s Lender of First Opportunity!

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Individualized decision- making based on your situation; not formula- driven lending

America’s Lender of First Opportunity!

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Partner with wide variety of resources

Other lenders

Extension Service

Other experts

America’s Lender of First Opportunity!

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Offer services not available by any other lender

FSA uses state-of-the-art farm planning software

America’s Lender of First Opportunity!

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Sustained service

We stick with you – even through tough times

America’s Lender of First Opportunity!

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How do we do it?

Direct and Guaranteed lending programs

Operating loans (OL)

Farm Ownership loans (FO)

Emergency loans (EM)*

* Direct loan product, only

America’s Lender of First Opportunity!

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Farm Loan Programs

Beginning Farmers

Socially Disadvantaged applicants (SDA)

General eligibility

Getting started

Resources

Answer questions

America’s Lender of First Opportunity!

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Farm Loan Programs

Direct Loans

Loan applications received and processed by FSA staff

Guaranteed Loans

Farmers work directly with a lender. The Lender then makes arrangements with FSA for a guarantee.

America’s Lender of First Opportunity!

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Direct Operating Loans (OL)

Annual operating expenses

Seed, fuel, fertilizer, etc.

Machinery and livestock purchase

Direct Farm Ownership Loans (FO)

Purchase farm real estate

Improve real estate property

Emergency Loans (EM)

America’s Lender of First Opportunity!

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Guaranteed Loan Programs

Operating Loans (OL)

Terms Loans and

Lines of Credit

Farm Ownership (FO) Loans

America’s Lender of First Opportunity!

america s lender of first opportunity15
America’s Lender of First Opportunity!

FSA Loan Limits

Direct loans

OL - $300,000

FO - $300,000

EM - $500,000

Guaranteed loans

$1,112,000 (FY 2010)

america s lender of first opportunity16
America’s Lender of First Opportunity!

FSA offers lending programs to a wide variety of farming operations

Smaller, larger, traditional, non- traditional…

Congressional targeting

america s lender of first opportunity17
America’s Lender of First Opportunity!

Congressional Targeting

Beginning Farmers

Socially Disadvantaged Applicants

america s lender of first opportunity18
America’s Lender of First Opportunity!

Beginning Farmers

Has operated a farm for 10 years or less

Meets requirements of the program which he/she is applying

For FO loans, owns acreage of less than 30% of the median size farm in the county

FSA does not use age in making this

determination

america s lender of first opportunity19
America’s Lender of First Opportunity!

Socially Disadvantaged Applicant

Defined by law -

“one who is a member of a socially disadvantaged group whose members have been subjected to racial, ethnic, or gender prejudice because of their identity as a member of a group without regard to their individual qualities.”

america s lender of first opportunity20
America’s Lender of First Opportunity!

Socially Disadvantaged Applicant

For FLP purposes, *

American Indians or Alaskan Natives

Asians

Blacks or African Americans

Native Hawaiians or other Pacific Islanders

Hispanics

women

* Other FSA programs may have different SDA definitions.

america s lender of first opportunity21
America’s Lender of First Opportunity!

Congressional Targeting

All eligibility / loan feasibility requirements must be met

Identification in these targeted groups often allows for easier access to limited program funds

Funding targets are set by law

america s lender of first opportunity22
America’s Lender of First Opportunity!

Congressional Targeting

Down Payment Loan Program

5% - minimum down payment

45% - FSA direct loan (maximum $225,000)

Reduced interest rate

Balance will come from other sources (can be guaranteed)

america s lender of first opportunity23
America’s Lender of First Opportunity!

General Eligibility

Different criteria may apply depending on loan programs involved

Operating loans

Farm ownership loans

Emergency loans

america s lender of first opportunity24
America’s Lender of First Opportunity!

General Eligibility

Need lender referral

US Citizen or legal resident alien

Acceptable credit history

Owner-operator or tenant operator

america s lender of first opportunity25
America’s Lender of First Opportunity!

General Eligibility

Not be delinquent on a federal debt

Not previously caused the Agency loss

In all cases, must demonstrate adequate Management Ability

america s lender of first opportunity26
America’s Lender of First Opportunity!

Management Ability

Each loan program has slightly different requirements

Operating Loans

1-year complete production and marketing cycle (within the past 5 years)

Farm Ownership Loans

3 years complete production and marketing cycle (within past 10 years)

america s lender of first opportunity27
America’s Lender of First Opportunity!

Financing start-up operations

Know what you want, but, be realistic

Write it down

Don’t expect everything – at least, not all at once

It may take years to accomplish your goals

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America’s Lender of First Opportunity!

Business Plan

How are you going to get from here to there?

Short and long term goals?

Plan conservatively

Plan for contingencies

More than theoretical

More than internet research

america s lender of first opportunity29
America’s Lender of First Opportunity!

Business Plan

Flexible

Have records to support projections

Have good financial records

Get help from experts

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America’s Lender of First Opportunity!

What is FSA looking for…

Creditworthiness

History is a good indication of the future

Collateral

Does FSA have enough security to protect its investment?

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America’s Lender of First Opportunity!

What is FSA looking for…

Capacity

Can the farming operation repay the loan?

Capital

What is the customers contribution?

america s lender of first opportunity32
America’s Lender of First Opportunity!

What is FSA looking for…

Conditions

What’s necessary to close the loan?

Hazard insurance, etc.

america s lender of first opportunity33
America’s Lender of First Opportunity!

Finding FSA Resources

Via the internet …

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America’s Lender of First Opportunity!

Every farming operation is different and impacted differently by many factors.

The information contained in this presentation is general in nature and intended to be used as a starting point for discussion. Regulations change frequently, impacting the validity and reliability of this information. This information should not be used as the sole basis of any decision. A thorough evaluation of your specific farming operation, situation and available FSA programs and requirements is necessary in every instance. Please contact your FSA staff to discuss your individual circumstances.