Ask FSA Andy about FSA guaranteed loans


Hello again!

My youngest daughter will be graduating from high school this year, of course we have had endless conversations about colleges, tech schools, specialized class and just getting a job.

She has had odd jobs for several years, housesitting, the local pizza shop, cleaning an office and basic high school jobs.

But now comes the time to compare the savings account to the cost of continuing education. Needless to say, she doesn’t like the way the numbers are working out, since like most young students, they never seem to work out in their favor.


So a plan needs to be put into place so she can make her payments each month for her massotherapy classes.

A student loan may be in her future, but of course, being 17 with basically no credit, her dad and I will become her “guaranteed lender.”

We won’t be giving her the money, but we will put our names in ink on the loan papers to ensure that if she doesn’t pay the money back, we will be standing behind her and her debt. The Farm Service Agency has a similar program for the local lender that may not meet the requirements of a banks normal underwriting criteria.

This is a very good program and most frequently needed when crop prices seem to just continue on a downward slide.

Guaranteed loan program

FSA guaranteed loans allow lenders to provide agricultural credit to farmers who do not meet the lender’s normal underwriting criteria.

Farmers and producers apply for a guaranteed loan through a lender, and the lender arranges for the guarantee. FSA can guarantee up to 95 percent of the loss of principal and interest on a loan.

Guaranteed loans can be used for both farm ownership and operating purposes. Guaranteed farm ownership loans can be used to purchase farmland, construct or repair buildings, develop farmland to promote soil and water conservation or to refinance debt.

Guaranteed operating loans can be used to purchase livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance and other operating expenses.

FSA can guarantee farm ownership and operating loans up to $1,399,000.

Repayment terms vary depending on the type of loan, collateral and the producer’s ability to repay the loan. Operating loans are normally repaid within seven years and farm ownership loans are not to exceed 40 years.

Contact your lender or local FSA farm loan office for more information on guaranteed loans.

That’s all for now,

FSA Andy


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