Small Town News

Farm loan program options at FSA

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FSA Notes Turner County Farm Service Agency Parker - 297-5564

The Farm Service Agency (FSA) offers loans for farmers and ranchers to purchase farmland and finance agricultural operations. FSA loan programs are designed to help producers who are temporarily unable to obtain private or commercial credit. In many cases, applicants are beginning farmers who have insufficient net worth to qualify for financing through a commercial lender. In other instances, borrowers might have suffered setbacks from natural disasters or might be persons with limited resources.

Farm ownership loans or farm operating loans may be obtained as direct loans for a maximum of up to $300,000. Guaranteed loans can reach a maximum indebtedness of $1,094,000. Emergency loans are always direct loans for fanners who may have suffered physical or production losses in disaster areas designated by a Presidential or Secretarial disaster declaration. Rural youth loans, loans to beginning farmers and loans for socially disadvantaged applicants are also available through FSA.

For detail information loan eligibility or the different available loan programs, just contact the county office staff for an appointment with a farm loan officer.

Down payment loan program

FSA has a special loan program to assist socially disadvantaged and beginning farmers in purchasing a farm. Retiring farmers may use this program to transfer their land to future generations.

To qualify:

The applicant must make a cash down payment of at least 5 percent of the purchase price.

The maximum loan amount does not exceed 45 percent of the least of (a) the purchase price of the farm or ranch to be acquired; (b) the appraised value of the farm or ranch to be acquired; or (c) $500,000 (Note: This results in a maximum loan amount of $225,000).

The term of the loan is 20 years. The interest rate is 4 percent below the direct Farm Ownership Loan rate, but not lower than 1.5 percent.

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.

Youth loans

The Farm Service Agency makes loans to rural youths to establish and operate agricultural income-producing projects in connection with 4-H clubs, FFA and other agricultural groups. Projects must be planned and operated with the help of the organization advisor, produce sufficient income to repay the loan and provide the youth with practical business and educational experience. The maximum loan amount is $5000.

Youth loan eligibility requirements:

Be a citizen of the United States (which includes Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands) or a legal resident alien

Be 10 years to 21 years of age

Live in a rural area or in a town of 50,000 people or fewer

Must obtain a written recommendation and consent from a parent or guardian if the applicant has not reached die age of majority under state law

Comply with FSA's general eligibility requirements

Conduct a modest agricultural income-producing project in a supervised program of work as outlined above

Demonstrate capability of planning, managing and operating me project under guidance and assistance from a project advisor. The project supervisor must recommend the project and me loan, along with providing adequate supervision.

Please call me office with questions or to make an appointment at 605-297-5564.



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© 2011 Freeman Courier Freeman, South Dakota. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from DAS.

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