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Farm Operating Loans

Published on AidPage by IDILOGIC on Jun 24, 2005

Administered by:

US Federal Government Agency (see all agencies)
Department of Agriculture , Farm Service Agency
CFDA #: 10.406

Who is eligible to apply...

Except for youth loans, individual applicants must: 1) Not have caused a loss to the Agency after April 4, 1996, or received debt forgiveness on more than 3 occasions prior to April 4, 1996 to receive a guaranteed loan; 2) have the necessary education and/or farm experience or training (1 year's complete production and marketing cycle within the last 5 years); 3) do not exceed the limitation on the number of years that assistance may be received; 4) possess the legal capacity to incur the obligations of the loan; 5) be unable to obtain sufficient credit elsewhere at reasonable rates, and terms; 6) project the ability to repay the loan; 7) be a citizen or permanent resident of the United States; 8) after the loan is closed, be an owner/tenant operator of a family farm; and 9) comply with the highly erodible land and wetland conservation provisions of Public Law 99-198 of the Food Security Act of 1985 (FSA); Certain corporations, cooperatives, partnerships and joint operations ("entities") operating family-sized farms are also eligible for farm operating loans. In brief, entity applicants must meet some of the same eligibility requirements as individual applicants. In addition, if members, stockholders or shareholders of the entity are related by blood or marriage, at least one stockholder, shareholder partner or joint operator must operate the family-sized farm. In the case when members are not related by blood or marriage, the majority interest holders in the entity must actually operate the family-sized farm to be eligible. The entity must be authorized to operate a farm in the State in which it is located. Limited resource applicants must meet the above requirements. In addition, they must have a low income and show a need for increased farm income. In the case of limited resource entities, all the partners, joint operators, members, or stockholders must be citizens and the entity must be the owner-operator of the family farm with at least one partner, joint operator, member or stockholder operating the farm. Assistance is authorized for eligible applicants in the 50 States, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and to the extent the Secretary determines it to be feasible and appropriate, the Trust Territories of the Pacific Islands. 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.

Eligible Applicant Categories:
Eligible Functional Categories:

Applicants must prove that credit is not available elsewhere for the requested purposes. This program is excluded from coverage under OMB Circular No. A-87.

Note:This is a brief description of the credentials or documentation required prior to, or along with, an application for assistance.

About this section:

This section indicates who can apply to the Federal government for assistance and the criteria the potential applicant must satisfy. For example, individuals may be eligible for research grants, and the criteria to be satisfied may be that they have a professional or scientific degree, 3 years of research experience, and be a citizen of the United States. Universities, medical schools, hospitals, or State and local governments may also be eligible. Where State governments are eligible, the type of State agency will be indicated (State welfare agency or State agency on aging) and the criteria that they must satisfy.

Certain federal programs (e.g., the Pell Grant program which provides grants to students) involve intermediate levels of application processing, i.e., applications are transmitted through colleges or universities that are neither the direct applicant nor the ultimate beneficiary. For these programs, the criteria that the intermediaries must satisfy are also indicated, along with intermediaries who are not eligible.