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FSA offers joint financing option on direct farm ownership loans

• Aug 11, 2018 at 10:00 AM

The USDA Farm Service Agency’s (FSA) Direct Farm Ownership loans are a resource to help farmers become owner-operators of family farms, improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations.

Depending on the applicant’s needs, there are three types of Direct Farm Ownership Loans: regular, down payment and joint financing. FSA also offers a Direct Farm Ownership Microloan option for smaller financial needs up to $50,000.

Joint financing allows FSA to provide more farmers with access to capital. FSA lends up to 50 percent of the total amount financed. A commercial lender, a State program or the seller of the property being purchased, provides the balance of loan funds, with or without an FSA guarantee. The maximum loan amount for a Direct Joint Financing loan is $300,000 and the repayment period for the loan is up to 40 years. To be eligible, the operation must be an eligible farm enterprise.

Farm Ownership loan funds cannot be used to finance nonfarm enterprises and all applicants must be able to meet general eligibility requirements. Loan applicants are also required to have participated in the business operations of a farm or ranch for at least three years out of the 10 years prior to the date the application is submitted. The applicant must show documentation that their participation in the business operation of the farm or ranch was not solely as a laborer. For more information about FSA Loan programs, contact your County FSA office.

In other news...

Maintaining good credit history: Farm Service Agency (FSA) Farm Loan programs require that applicants have a satisfactory credit history. A credit report is requested for all FSA direct farm loan applicants. These reports are reviewed to verify outstanding debts, if bills are paid timely and to determine the impact on cash flow. Information found on a customer’s credit report is strictly confidential and is used only as an aid in conducting FSA business. Our farm loan staff will discuss options with you if you have an unfavorable credit report and will provide a copy of your report.

If you dispute the accuracy of the information on the credit report, it is up to you to contact the issuing credit report company to resolve any errors or inaccuracies. There are multiple ways to remedy an unfavorable credit score. Make sure to pay bills on time. Setting up automatic payments or automated reminders can be an effective way to remember payment due dates. Pay down existing debt .Keep your credit card balances low. Avoid suddenly opening or closing existing credit accounts. FSA’s farm loan staff will guide you through the process, which may require you to reapply for a loan after improving or correcting your credit report.

For more information on FSA farm loan programs, visit www.fsa.usda.gov.

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Breaking new ground

Agricultural producers are reminded to consult with FSA and NRCS before breaking out new ground for production purposes as doing so without prior authorization may put a producer’s federal farm program benefits in jeopardy. This is especially true for land that must meet Highly Erodible Land (HEL) and Wetland Conservation (WC) provisions. Producers with HEL determined soils are required to apply tillage, crop residue and rotational requirements as specified in their conservation plan. Producers should notify FSA as a first point of contact prior to conducting land clearing or drainage type projects to ensure the proposed actions meet compliance criteria, such as clearing any trees to create new cropland. These areas may need to be reviewed to ensure such work will not risk your eligibility for benefits.

Landowners and operators complete the form AD-1026 - Highly Erodible Land Conservation (HELC) and Wetland Conservation (WC) Certification to identify the proposed action and allow FSA to determine whether a referral to Natural Resources Conservation Service (NRCS) for further review is necessary.

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Dates to remember:

Aug. 17 — 2018 CRP continuous enrollment signup deadline.

Sept. 3 — Labor Day holiday. FSA offices closed.

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