USDA - Farm Service Agency Farm Loan Programs America’s Lender of First Opportunity!

1. USDA - Farm Service Agency Farm Loan Programs America’s Lender of First Opportunity!

2. United States Department of Agriculture (USDA) Farm Service Agency (FSA) Farm Loan Programs America’s Lender of First Opportunity!

3. America’s Lender of First Opportunity! FSA has been involved in agricultural lending for more than 70 years! FSA offers loan and credit counseling assistance to farmers who want to own and operate their own farm

4. Individualized farm and business planning expertise America’s Lender of First Opportunity!

5. Loan products tailored to your farming operation and needs Loans at low interest rates and extended terms America’s Lender of First Opportunity!

6. Individualized decision- making based on your situation; not formula- driven lending America’s Lender of First Opportunity!

7. Partner with wide variety of resources Other lenders Extension Service Other experts America’s Lender of First Opportunity!

8. Offer services not available by any other lender FSA uses state-of-the-art farm planning software America’s Lender of First Opportunity!

9. Sustained service We stick with you – even through tough times America’s Lender of First Opportunity!

10. How do we do it? Direct and Guaranteed lending programs Operating loans (OL) Farm Ownership loans (FO) Emergency loans (EM)* * Direct loan product, only America’s Lender of First Opportunity!

11. Farm Loan Programs Beginning Farmers Socially Disadvantaged applicants (SDA) General eligibility Getting started Resources Answer questions America’s Lender of First Opportunity!

12. Farm Loan Programs Direct Loans Loan applications received and processed by FSA staff Guaranteed Loans Farmers work directly with a lender. The Lender then makes arrangements with FSA for a guarantee. America’s Lender of First Opportunity!

13. Direct Operating Loans (OL) Annual operating expenses Seed, fuel, fertilizer, etc. Machinery and livestock purchase Direct Farm Ownership Loans (FO) Purchase farm real estate Improve real estate property Emergency Loans (EM) America’s Lender of First Opportunity!

14. Guaranteed Loan Programs Operating Loans (OL) Terms Loans and Lines of Credit Farm Ownership (FO) Loans America’s Lender of First Opportunity!

15. America’s Lender of First Opportunity! FSA Loan Limits Direct loans OL - $300,000 FO - $300,000 EM - $500,000 Guaranteed loans $1,112,000 (FY 2010)

16. America’s Lender of First Opportunity! FSA offers lending programs to a wide variety of farming operations Smaller, larger, traditional, non- traditional… Congressional targeting

17. America’s Lender of First Opportunity! Congressional Targeting Beginning Farmers Socially Disadvantaged Applicants

18. America’s Lender of First Opportunity! Beginning Farmers Has operated a farm for 10 years or less Meets requirements of the program which he/she is applying For FO loans, owns acreage of less than 30% of the median size farm in the county FSA does not use age in making this determination

19. America’s Lender of First Opportunity! Socially Disadvantaged Applicant Defined by law - “one who is a member of a socially disadvantaged group whose members have been subjected to racial, ethnic, or gender prejudice because of their identity as a member of a group without regard to their individual qualities.”

20. America’s Lender of First Opportunity! Socially Disadvantaged Applicant For FLP purposes, * American Indians or Alaskan Natives Asians Blacks or African Americans Native Hawaiians or other Pacific Islanders Hispanics women * Other FSA programs may have different SDA definitions.

21. America’s Lender of First Opportunity! Congressional Targeting All eligibility / loan feasibility requirements must be met Identification in these targeted groups often allows for easier access to limited program funds Funding targets are set by law

22. America’s Lender of First Opportunity! Congressional Targeting Down Payment Loan Program 5% - minimum down payment 45% - FSA direct loan (maximum $225,000) Reduced interest rate Balance will come from other sources (can be guaranteed)

23. America’s Lender of First Opportunity! General Eligibility Different criteria may apply depending on loan programs involved Operating loans Farm ownership loans Emergency loans

24. America’s Lender of First Opportunity! General Eligibility Need lender referral US Citizen or legal resident alien Acceptable credit history Owner-operator or tenant operator

25. America’s Lender of First Opportunity! General Eligibility Not be delinquent on a federal debt Not previously caused the Agency loss In all cases, must demonstrate adequate Management Ability

26. America’s Lender of First Opportunity! Management Ability Each loan program has slightly different requirements Operating Loans 1-year complete production and marketing cycle (within the past 5 years) Farm Ownership Loans 3 years complete production and marketing cycle (within past 10 years)

27. America’s Lender of First Opportunity! Financing start-up operations Know what you want, but, be realistic Write it down Don’t expect everything – at least, not all at once It may take years to accomplish your goals

28. America’s Lender of First Opportunity! Business Plan How are you going to get from here to there? Short and long term goals? Plan conservatively Plan for contingencies More than theoretical More than internet research

29. America’s Lender of First Opportunity! Business Plan Flexible Have records to support projections Have good financial records Get help from experts

30. America’s Lender of First Opportunity! What is FSA looking for… Creditworthiness History is a good indication of the future Collateral Does FSA have enough security to protect its investment?

31. America’s Lender of First Opportunity! What is FSA looking for… Capacity Can the farming operation repay the loan? Capital What is the customers contribution?

32. America’s Lender of First Opportunity! What is FSA looking for… Conditions What’s necessary to close the loan? Hazard insurance, etc.

33. America’s Lender of First Opportunity! Finding FSA Resources Via the internet …

34. www.fsa.usda.gov

42. America’s Lender of First Opportunity! Questions And Answers??

43. America’s Lender of First Opportunity! Every farming operation is different and impacted differently by many factors. The information contained in this presentation is general in nature and intended to be used as a starting point for discussion. Regulations change frequently, impacting the validity and reliability of this information. This information should not be used as the sole basis of any decision. A thorough evaluation of your specific farming operation, situation and available FSA programs and requirements is necessary in every instance. Please contact your FSA staff to discuss your individual circumstances.