Higher loan limit now available for USDA guaranteed agricultural loans
The United States Department of Agriculture (USDA) announces that a higher loan limit will be available for borrowers seeking a secured agricultural loan from October 1, 2021, from $ 1.776 million to $ 1.825 million. dollars.
?? Agricultural loans are essential for our clients ?? family annual operating and living expenses, emergency needs and cash flow? FSA administrator Zach Ducheneaux said. ?? Raising the guaranteed loan limit will allow FSA to better meet the financial needs of producers as natural disasters and the pandemic continue to impact their operations.
FSA agricultural loans provide access to finance for a wide range of producer needs, from securing land to financing the purchase of equipment. Secured loans are funded and managed by commercial lenders. FSA provides up to 95% guarantee against possible financial loss of principal and interest. Secured loans can be used for both agricultural property and operating purposes.
During fiscal year 2021, FSA experienced continued strong demand for secured loans. FSA has committed more than $ 3.4 billion in secured farm and farm property loans. This includes almost $ 1.2 billion for beginning farmers. The number of secured borrowers has increased by 10% to more than 38,750 farmers and ranchers over the past decade. The FSA expects growing demand for agricultural loans to continue in fiscal 2022.
Extension of the disaster reserve
USDA has additional support available to growers given recent outbreaks of the COVID-19 Delta variant and has extended the availability of COVID-19 Disaster Set-Aside (DSA) for installments due until January 31, 2022 Additionally, the FSA will authorize a second AED for COVID-19 and a second AED for natural disasters for those who have had a first COVID-19 AED. Requests for a COVID-19 AED or second AED must be received no later than May 1, 2022.
Last year, the FSA expanded the use of the DSA. Normally used in the aftermath of natural disasters, the DSA can now allow farmers receiving USDA agricultural loans who are affected by COVID-19 and determined to be eligible, to set aside their next payment. The freeze payment deadline is postponed to the final loan maturity or extended up to twelve months in the case of an annual operating loan. Any principal set-aside will continue to accrue interest until it is repaid. This will improve the borrower’s cash flow in the current production cycle.
Producers can explore the options available on all FSA loan options at fsa.usda.gov or by contacting their Local USDA Service Center. Service Center staff continue to work with agricultural producers by phone, email and other digital tools. Due to the pandemic, some USDA Service Centers are open to a limited number of visitors. Contact your service center to schedule an appointment in person or by phone. Additionally, more information related to USDA response and relief for growers can be found at farmers.gov/coronavirus.
The USDA touches the lives of all Americans every day in so many positive ways. In the Biden-Harris administration, the USDA is transforming the American food system with a greater emphasis on more resilient local and regional food production, fairer markets for all producers, ensuring access to healthy food and in all communities, creating new markets and income streams for farmers and producers using climate-smart food and forestry practices, making historic investments in clean energy infrastructure and capacity in the regions rural America, and a commitment to equity across the department by removing systemic barriers and creating a workforce that is more representative of America. To learn more, visit www.usda.gov.