FSA loan options require certain criteria

Hello Again!

Each year Congress appropriates funds for FSA farm loans as part of the U.S. Department of Agriculture budget. The funds are appropriated for the fiscal year, which runs from Oct. 1 until Sept. 30 the following year.

The amount of money approved by Congress does not always meet the demand for loan funds. Loan funds are allocated to each state based on the number of farmers in the state and other factors.

Emergency loan funds are not allocated to states as it is impossible to predict where natural disasters will occur. Guaranteed loan funds are also held in Washington and are available to all states.

Two categories

FSA is required by law to reserve loan funds for two specific categories: Beginning farmers and socially disadvantaged applicants (SDAs). The law requires FSA to reserve 50 percent of the direct operating loan funds and 75 percent of the direct farm ownership loan funds for beginning farmers until Sept. 1 of each year.

The percentage of loan funds reserved for SDA’s is based on the percentage of the total rural population made up of SDA groups and the statewide percentage of total farmers who are female.

Each state has to track their allocation of loan funds in each category similar to an account ledger. Ohio has four account ledgers for direct operating loan funds: Non-beginning farmer, non-beginning SDA farmer, beginning farmer, and beginning SDA farmer.

Ohio has nine account ledgers for direct farm ownership loan funds. FSA cannot move funds from one account ledger to another until after the target dates have passed. FSA loan applications are processed as the applications are received.

Completed application

A loan decision cannot be made until a complete application is received. After the loan application is approved, the loan request is submitted for funding.

Loan requests are funded in date order based on the date the application was received. FSA still accepts, processes and approves loan applications even when we have run out of funds for a loan program. If loan funds are not available, the approved application is placed on a waiting list in order by the date the application was received.

Farmers who plan to apply to the Farm Service Agency for operating loan assistance this year are encouraged to apply as soon as possible. The earlier an application for loan assistance is filed, the quicker the FSA loan officers can process your request.

In addition, due to budget constraints, farmers that wait until later in the fiscal year to apply, often run the risk of finding out that FSA funding allocations have been utilized already. Farmers who are considering applying for an FSA farm loan should contact their local FSA office or the Farm Loan team for their area to obtain information on what is required to have a complete application.

Additional information on Farm Service Agency farm loans can also be obtained from the FSA website at www.fsa.usda.gov.

That’s all for now,

FSA Andy

About the Author

FSA Andy is written by USDA Farm Service Agency county executive directors in northeastern Ohio. More Stories by FSA Andy

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