Farm Operating Loans
To enable operators of not larger than family farms through the extension of credit and supervisory assistance, to make efficient use of their land, labor, and other resources, and to establish and maintain financially viable farming and ranching operations.
General information about this opportunity
Last Known Status
Agency: Department of Agriculture
Office: Farm Service Agency
Type(s) of Assistance Offered
DIRECT LOANS; GUARANTEED/INSURED LOANS
Fiscal Year 2014: Actual Direct Operating Loans made in FY 2014 were 22,731 with actual obligations of $1,201,284,000. Actual Guaranteed Operating Loans made in FY 2014 were 4,131 with actual obligations of $1,000,135,000. Fiscal Year 2015: The Agency estimates 22,764 Direct Operating Loans being made in FY 2015 for total obligations estimated at $1,252,100,000. Through 7-29-2015 there 20,624 loans made with a value of $1,163,611,000.
The Agency estimates 4,848 Guaranteed Operating Loans being made in FY 2015 for total obligations estimated at $1,395,897,000. Through 7-29-2015 there were 4,365 loans made with a value of $1,253,046,000. Fiscal Year 2016: The Agency estimates 22,764 Direct Operating Loans being made in FY 2016 for total obligations estimated at $1,252,004,000.
The Agency estimates 4,848 Guaranteed Operating Loans being made in FY 2016 for total obligations estimated at $1,393,443,000.
Farm and Rural Development Act, as amended, Subtitle B, Sections 311-317, Public Law 92-419, 7 U.S.C. 1942; Agriculture Act of 1961, Title III, Public Law 87-128.
Who is eligible to apply/benefit from this assistance?
Except for youth loans, individual applicants must: (1) Be a citizen of the Untied States, United States non-citizen national, or a qualified alien under applicable Federal immigration laws; (2) have the legal capacity to incur the obligations of the loan; (3) be unable to obtain credit elsewhere or unable to obtain the loan without a guarantee; (4) not have had a previous loan which resulted in a loss to the Agency (with certain conditions); (5) not be delinquent on any federal debt; (6) after the loan is closed, be an owner/tenant operator of a family farm. For an operating loan (OL), the producer must be the operator of a family farm; (7) not have been convicted of crop insurance fraud (in certain circumstances); and (8) not have any controlled substance convictions. In addition, a direct loan applicant must have sufficient education, training, or experience in managing and operating a farm or ranch that demonstrates the managerial ability to succeed in farming. Corporations, cooperatives, joint operations, and partnerships and their members/stakeholders must meet most of these same eligibility requirements, and the entity must also be authorized to operate a farm or ranch in the State where the land is located. To be eligible to obtain a direct loan, a borrower must agree to abide by any "borrower training" requirements. Applicants/borrowers requesting guaranteed loan assistance must meet all lender requirements.
Applicants/borrowers are the direct beneficiaries and must meet the applicant eligibility requirements Families, individuals, and entities who are or plan to become farmers, ranchers or aquaculture operators are the beneficiaries.
Applicants for direct loans must be unable to obtain credit elsewhere and applicants for guaranteed loans must be unable to obtain credit without the guarantee. This program is excluded from coverage under 2 CFR 200, Subpart E - Cost Principles.
What is the process for applying and being award this assistance?
Preapplication coordination is not applicable. Environmental impact information is not required for this program. This program is excluded from coverage under E.O. 12372.
This program is excluded from coverage under 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Applicants may apply for direct loans at local FSA offices. If the total outstanding direct operating loan debt will be less than $50,000, it would be considered a direct microloan. Microloans have a streamlined application process. Guaranteed loans may be available from local commercial lenders who apply for loan guarantees from FSA.
FSA determines if the applicant is eligible and reviews the application for repayment ability, security, and compliance with other regulations, approves and obligates the loan.
Approval/Disapproval Decision Time
The loan approval official approves or disapproves a completed application. The average approval time for direct loans is 30 days and 10 days for guaranteed loans.
From 30 to 60 days. Applicants for direct and guaranteed loans, may appeal adverse action taken. The applicant is given an opportunity to appeal the decision to the National Appeals Division. The applicant may, in the final step of the appeals process, request a review by the Director, National Appeals Division, Washington, DC.
Applicants may reapply at any time. Applicants denied assistance through the appeal process must establish that substantial change has occurred, since the denial decision.
How are proposals selected?
How may assistance be used?
Loan funds may be used to: (1) Purchase livestock, poultry, and other farm animals; (2) purchase farm equipment, feed, seed, fuel, farm chemicals, insurance (3) provide operating expenses for farm enterprise; OL funds can be used to pay for: (4) minor improvements to buildings (5) costs associated with land and water development (6) family subsistence (7) refinance debts under certain conditions and (8) finance youth projects. ( Use restrictions are shown under Applicant Eligibility.
What are the requirements after being awarded this opportunity?
Records on production, income, expenses during the period of the loan.
Other Assistance Considerations
Formula and Matching Requirements
Statutory formulas are not applicable to this program.
Matching requirements are not applicable to this program.
MOE requirements are not applicable to this program.
Length and Time Phasing of Assistance
Loans are scheduled for repayment over periods up to 7 years, but when justified, loans may be consolidated or rescheduled for up to 15 additional years. The interest rate for guaranteed loans is negotiated between the lender and borrower. The interest rate for direct loans is determined by the Secretary of Agriculture. See the following for information on how assistance is awarded/released:. Method of awarding/releasing assistance: lump sum.
Who do I contact about this opportunity?
Regional or Local Office
See Regional Agency Offices. Contact the appropriate FSA State Office listed in Appendix IV of the Catalog. Visit the FSA website at www.fsa.usda.gov.
Connie Holman 1400 Independence Avenue, SW
, washington, District of Columbia 20250 Email: email@example.com
12-4212-0-3-351 - Direct Loans Financing Account; 12-1140-0-1-351; 12-4213-0-3-351 - Guranteed Loans Financing Account.
(Direct Loans) FY 14 $1,201,284,000; FY 15 est $1,252,100,000; and FY 16 est $1,252,004,000. (Guaranteed/Insured Loans) FY 14 $1,000,135,000; FY 15 est $1,395,897,000; and FY 16 est $1,393,443,000
Range and Average of Financial Assistance
Direct Farm Operating Loans up to $300,000 ($50,000 or less is considered a microloan);
Guaranteed Farm Operating Loans up to $1,392,000. (amount adjusted annually)
FY 2014; Direct Farm Operating Loan average loan size $52,848.
FY 2014; Guaranteed Farm Operating Loan average loan size $242,104.
Regulations, Guidelines and Literature
7 CFR, Part 761, 762, 764.
Farm Service Agency Fact Sheets;
FSA Handbook 1 FLP, 2 FLP, 3-FLP;
Program Aids 1610 "Farm Service Agency Producer's Guide to Loan Programs"; 1620 "Lender's Guide to FSA Loan Programs:
FSA Brochure FSA-BR-01 "Your Guide to FSA Farm Loans",
above information is available on FSA website at:www.fsa.usda.gov.
Examples of Funded Projects