By Jamie Martin
The USDA is helping new farmers and ranchers grow their operations by offering loan programs through its Farm Service Agency (FSA). These loans are vital for those unable to obtain credit through banks.
FSA provides direct and guaranteed loans. Guaranteed loans are arranged through local lenders and backed by FSA, while direct loans are provided by FSA itself. This ensures broader access to funding.
The two main loan types are farm ownership and farm operating loans. Ownership loans help farmers buy land, build infrastructure, or invest in soil conservation. Operating loans support daily costs, livestock, equipment, labor, and more.
Applicants must be beginning farmers or ranchers, defined as having under 10 years of farming experience. They must also actively manage or work on the farm. Ownership loan applicants must not own land exceeding 30% of the average farm size in their county.
Three years of farming experience in the last decade is required for direct ownership loans. Equivalent experience through education, military service, or mentorship can substitute. If applying as an entity, all members must be related and meet the beginning farmer criteria, with at least one person having three years of farm experience.
Direct operating loans have repayment terms between one and seven years, while ownership loans can extend up to 40 years. Interest rates vary and are set based on government borrowing costs. Guaranteed loans follow lender terms.
To learn more, contact your local FSA office or visit farmers.gov.
Photo Credit: usda
Categories: National