THE 2014 farm bill modified the U.S. Department of Agriculture's Farm Service Agency (FSA) farm loan programs, providing additional resources to the countryside.
"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," Agriculture Secretary Tom Vilsack said.
The farm bill expands lending opportunities for thousands of farmers and ranchers to begin and continue operations, including providing greater flexibility in determining eligibility, raising loan limits and emphasizing beginning and socially disadvantaged producers.
FSA said customers can expect the following actions to take effect immediately:
* The percent of guarantee offered on all conservation loans will increase from 75% to 80%, and it will increase to 90% for conservation loans made to socially disadvantaged and beginning farmers.
* The interest rate charged on direct farm ownership loans that are made in conjunction with other lenders will be set at 2% below the regular direct farm ownership rate, with a floor of 2.5%.
* The requirement for FSA to appraise the value of oil, gas or other minerals to be used as collateral for farm ownership loans has been removed.
* The maximum loan amount for down payment farm ownership loans increased from $225,000 to $300,000, consistent with all other direct farm ownership loans.
* The rural residency requirement for youth loans was removed. Previously, to qualify for a youth loan, an applicant had to live in a rural area.
* Microloans made to beginning and veteran farmers or ranchers are exempt from direct term limits; however, term limits still apply for non-microloan direct loans (regular operating loans and farm ownership loans).
* A limited resource rate is available to beginning and veteran farmers who receive a microloan. Borrowers will be given a choice to accept the limited resource rate or regular operating loan rate.
* The restriction that an applicant can receive a guarantee operating loan for no more than 15 years has been eliminated.
* The definition of a qualified beginning farmer or rancher was modified to set the average size of farmland owned at no greater than 30% of the average farm size. Previously, this definition used the median farm size, which eliminated many otherwise qualified applicants.
* Debt forgiveness will no longer preclude a former youth loan borrower from obtaining additional loans from any U.S. government agency.
Additionally, borrowers with youth loan debt forgiveness or who are delinquent on youth loan debt can receive student loans. The servicing and collection of youth loans is not affected by the statute and will continue under the present regulation. FSA said it is revising the definition of debt forgiveness to comply with this statute.