FAQ: I've heard USDA has increased the loan limits for Farm Service Agency loans to qualifying farmers. How much will FSA lend? On what types of loans?
Answer: Provided by John Whitaker, state executive director for USDA's Farm Service Agency in Iowa. He reminds producers that although they are busy with the 2011 harvest, they also need to prepare to meet their credit needs for the upcoming year.
"Iowa agriculture has seen a lot of variables this year that could affect producers' needs for credit in different ways," says Whitaker. "These could include financial setbacks due to a natural disaster, strong commodity prices allowing the next generation to come back to the farm, or adding a new enterprise that will fill the needs of a niche or alternative crop market."
As of October 1, 2011, FSA's lending limit for Guaranteed Loans has increased to $1,214,000. That will provide additional credit options to meet farm financing needs. This lending limit increases every year according to an inflation index. The total assistance available through FSA's guaranteed and direct farm loan programs has likewise increased to $1,514,000.
Lending limits on FSA loans increased beginning October 1
FSA makes and guarantees a variety of loans for youth and new farmers, as well as experienced farmers or producers recovering from natural disasters. Direct and guaranteed loans are available to eligible farmers and can be used to purchase or improve real estate, finance livestock or crop enterprises, and purchase machinery or other capital items for the operation.
FSA specializes in loans to beginning and minority farmers, as well as to operations seeking to start or expand a specialized or alternative enterprise. A beginning farmer is generally defined as a producer who has operated a farm for 10 years or less and who does not own farm acreage greater than 30% of the median size farm in the county.
Farmers are encouraged to apply early so that a loan can be processed and funded in a timely manner. Applications and additional information are available at your local FSA office on on-line at www.fsa.usda.gov.
If you have specific questions or need details on USDA farm programs, contact your local USDA Farm Service Agency or other appropriate USDA agency office. And be sure to read the regular column of "Frequently Asked Questions about the Farm Program" appearing in each issue of Wallaces Farmer magazine and at www.WallacesFarmer.com.www.WallacesFarmer.com