How to Get a Farm Ownership Loan

What it is

A farm ownership loan is provided through the United States Department of Agriculture Farm Service Agency, or FSA. It makes direct and guaranteed farm ownership and operating loans to family size farmers and ranchers who cannot obtain commercial credit from the bank, Farm Credit System institution, or other lenders.

FSA farm ownership loans can be used to purchase farmland, construct or repair buildings and other fixtures, develop farmland to promote soil and water conservation, or to refinance debt. The amount of loans delivered through the farm ownership loan program is dependent on the status of the farmer. Farmers can be approved for amounts up to $200,000 with repayment plans of up to 40 years at rates as low as five percent.

Who it's for

Farmers aren't always able to be economically stable. Their success is dependent on a variety of uncontrollable factors, including the weather, water conditions, and natural disaster. Farmers who are just entering the business will require enough capital in order to ensure their future success through the purchase of appropriate real estate, supplies, livestock and equipment. FSA farm ownership loans are provided to beginning farmers who cannot qualify for conventional loans because they do not have sufficient financial resources.

What you need to do to apply

In order to be approved for a farm ownership loan, a farmer must provide information about economic and financial need, demonstrate difficulty obtaining commercial lending elsewhere, show willingness to repay, and produce collateral. People interested in obtaining a farm ownership loan are encouraged to visit a local USDA office or service center to learn more about this program and others, as well as receive essential information for completing the loan application.

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