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Farm Service Agency Farm Loans Program Lender of First Opportunity

Farm Service Agency Farm Loans Program Lender of First Opportunity. Delivery of FSA Programs. FSA Farm Loans: Lender of First Opportunity. National Presence, Local Service. FSA Farm Loans: Lender of First Opportunity. What We Do In Farm Loan Programs.

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Farm Service Agency Farm Loans Program Lender of First Opportunity

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  1. Farm Service Agency Farm Loans Program Lender of First Opportunity

  2. Delivery of FSA Programs

  3. FSA Farm Loans: Lender of First Opportunity National Presence, Local Service

  4. FSA Farm Loans: Lender of First Opportunity What We Do In Farm Loan Programs Provide temporary assistance through loans, credit counseling, and management advice to farmers to improve the farmer’s financial position so that the farmer may qualify for future loans through commercial credit sources.

  5. FSA Farm Loans: Lender of First Opportunity Who We Help • Farmers that lack experience, credit history, or significant net worth • Socially disadvantaged farmers (women, minorities) • Farmers with non-traditional enterprises • Vegetables, organic, specialty, value-added • Farmers experiencing economic, production, or physical disasters

  6. FSA Farm Loans: Lender of First Opportunity FSA helps thousands of Minnesotafarm families…. 2,736 farm families with $382 million of direct loans 1,866 farm families with a $657 million of guaranteed loans FSA is involved in financing 10% of Minnesota’s farmers

  7. FSA Farm Loans: Lender of First Opportunity FSA Has Two Types of Loan Programs Direct Loans FSA loan officer works directly with the farmer Comprehensive financial planning services Repayment terms tailored to farmer’s needs. Low interest rate Operating, Real Estate, Emergency

  8. FSA Farm Loans: Lender of First Opportunity • FSA Has Two Types of Loan Programs • Guaranteed Loans • Provides farmers credit through a conventional lender • Used as risk reduction tool • Lender determines the interest rate and loan terms. • Acts like an “insurance policy” Operating and Real Estate

  9. FSA Farm Loans: Lender of First Opportunity Direct Farm Loans Operating Loans Buy livestock, equipment, crop inputs, feed, expenses, refinance debt Low, fixed interest rate (1.375%) Repayment terms tailored to loan purpose and farmer’s repayment ability. Typically 1 – 7 years. Maximum of $300,000 Collateral would include the property being financed

  10. FSA Farm Loans: Lender of First Opportunity Direct Farm Loans Micro Loans Purposes are same as direct operating loans Low, fixed interest rate (1.375%) Repayment terms tailored to loan purpose and farmer’s repayment ability. Typically 1 – 7 years. Maximum of loan of $35,000 and total outstanding direct operating balance not to exceed $35,000 Minimal farm training and managerial ability Collateral would include the property being financed

  11. FSA Farm Loans: Lender of First Opportunity Direct Farm Loans Youth Loans Teach responsibility, caretaking, money management Start a modest agricultural income producing project 4-H or FFA Youths between ages of 10 and 20 Low, fixed interest rate (1.375%) Maximum of $5,000 Town with a population of 50,000 or less

  12. FSA Farm Loans: Lender of First Opportunity Direct Farm Loans Real Estate Loans Purchase farmland, building sites, construction, repair Low, fixed interest rate (1.5% - 3.5%) Repayment terms usually 20 - 40 years. Maximum of $300,000 Collateral would include farm being financed 3 years previous management experience

  13. FSA Farm Loans: Lender of First Opportunity Direct Farm Loans – Real Estate Down Payment - 5/45/50 Used to purchase farm Farmer must provide at least 5% down payment Open only to beginning farmers and socially disadvantage applicants

  14. FSA Farm Loans: Lender of First Opportunity Direct Farm Loans – Real Estate Down Payment - 5/45/50 - Example $500,000 Farm Purchase 25,000 Cash down payment $250,000 Lender $225,000 FSA 2nd mtg -- 1.5% 20 yrs.

  15. FSA Farm Loans: Lender of First Opportunity Guaranteed Farm Loans Operating Loans • Up to $1,302,000 • Line of credit • Purchase annual operating expenses • Up to 5 years • Term Loan • Buy livestock, equipment, refinance debt, and etc. • Usually 1 – 7 years

  16. FSA Farm Loans: Lender of First Opportunity Guaranteed Farm Loans Real Estate Loans Up to $1,302,000 Buy farmland, construction, repairs, refinancing Up to 40 years Guarantee allows loan to be sold on secondary market

  17. FSA Farm Loans: Lender of First Opportunity General qualifications for all loans • Own/Operate a family-sized farm • Sufficient farm training and managerial ability • Meet citizenship requirements • Be unable to obtain loan from a commercial lender • Acceptable credit history • Legal capacity to incur the debt.

  18. FSA Farm Loans: Lender of First Opportunity General qualifications for all loans • No previous loss to the government • There are some exceptions depending on type of loan • No conviction for controlled substance • No federal crop insurance disqualification • No delinquent federal debt

  19. FSA Farm Loans: Lender of First Opportunity Special qualification for direct Farm Ownership loan • Applicant must have 3 years of farm experience within the past 10 years • Met by either farming on own or providing labor and management on a farm

  20. FSA Farm Loans: Lender of First Opportunity Special qualification for direct Farm Ownership Downpayment loan • Beginning Farmers • Must not have farmed for more than 10 years • Must not own more than 30% of average median farm size for the county • Socially Disadvantage Applicants • Years farmed and farm size do not apply

  21. FSA Farm Loans: Lender of First Opportunity General qualifications for all loans • Farmer must have ability to repay the loan • Must demonstrate ability to pay all farm expenses, personal living expenses, and all debt payments from farm and non-farm income sources. • FSA considers financial ratios but does not base loan decision on ratios. • Farmer must pledge collateral with a value at least equal to the loan amount • FSA will take a lien on more collateral when available

  22. FSA Farm Loans: Lender of First Opportunity We offer more than just loans Farm Planning Analyze income, expenses, and production at end of the production year Assist farmer in developing a cash flow projection for the next year Assist farmer in analyzing expansion, capital purchases, or enterprise changes The success of our customers is the cornerstone of our business

  23. FSA Farm Loans: Lender of First Opportunity We offer more than just loans Professionals with training and backgrounds in lending and agriculture. Customers gain a source of guidance Help farmers establish goals for their farming operation Periodic visits to the farm

  24. FSA Farm Loans: Lender of First Opportunity Contact Us. On the web: www.fsa.usda.gov/

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