In support of the agricultural economy, the Farm Services Agency (FSA) offers operating loans to farming and ranching families to promote, build and maintain family farms.

The FSA provides direct and guaranteed loans. Under a secured loan, a commercial lender handles the loan and the FSA guarantees it with loss coverage of up to 95 percent of the loan's value. For individuals who are not yet eligible to obtain a secured loan from a commercial lender, the FSA offers direct loans, which are serviced by the FSA. The FSA is responsible for providing credit counseling and supervision to its direct borrowers by conducting a thorough evaluation of the farm operation.

The goal of the FSA farm loan programs is to graduate their borrowers to business credit. Once a farmer is able to obtain credit from the commercial loan sector, the agency's mission of providing supervised temporary credit is fulfilled.

Eligible applicants could obtain direct loans for up to a maximum indebtedness of $ 300,000 and directly operate microcredits for a maximum indebtedness of $ 50,000. The maximum indebtedness for a guaranteed loan is $ 1,399,000 (a figure that varies annually according to inflation) . The repayment term can vary but typically will not exceed seven years for medium-term purposes. Annual management loans are generally paid off within 12 months or when the merchandise produced is sold. In general, loan proceeds can be used for normal financing expenses, machinery, and equipment, minor real estate repairs or improvements, and to refinance debt. 

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Program requirements

To be eligible for assistance, applicants must have a family farm, be citizens, non-citizen nationals, or legal resident aliens of the United States or its territories, and be able to demonstrate a sufficient year of farm management experience. You must also meet all of the following:

Have a satisfactory record of meeting credit obligations, and

Have the legal capacity to meet the obligations of a loan, and

Not being able to obtain credit elsewhere at reasonable rates and terms to meet current needs, and

Be a tenant operator or owner-operator of a family farm after the loan closes.

Applicants are automatically ineligible if any of the following apply:

Be a current debtor of any federal debt, or

Have caused a loss to the FSA due to the discharge of some debt (certain exceptions apply).

Application Process

To apply for a direct operating loan, applicants should submit the appropriate application form along with the rest of the required documentation, to the USDA Service Center or Office of the County FSA. Please follow the guide on "How to Complete an FSA Loan Application" found on the FSA Fact Sheet. To obtain a form, visit the FSA's Farm Direct Loan Program Application Forms and Instructions page.

To apply for secured loans, consult your lender, who will complete the paperwork to obtain the collateral.

Loan Terms

Eligible applicants can obtain direct loans up to a maximum indebtedness of $ 300,000, as well as secured loans up to a maximum indebtedness of $ 1,392,000 (this amount is adjusted annually for inflation).

Loan repayment terms can vary, but generally do not exceed 7 years for immediate purposes.

Annual operating loans must generally be repaid within 12 months or when the product is sold. Generally speaking, loan proceeds can be used for normal operating expenses, such as machinery and equipment, real estate repairs, and debt refinancing.